Report published August 17, 2026
Westpac Australia & New Zealand Weekly: RBA Rate Hold & Economic Outlook (August 17, 2026)
Source and citation context
- Issuer
- Westpac
- Report date
- August 17, 2026
- Analysis as of
- August 14, 2026
Authors / editors: Luci Ellis (Chief Economist), Elliot Clarke (Head of International Economics)
Finvaulta summarizes Westpac's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
The RBA held the cash rate at 4.35% in August, narrowing the risk of additional hikes while maintaining a hawkish posture that is expected to keep rates unchanged through mid-2027. Meanwhile, New Zealand faces domestic political tensions and weak housing market activity, alongside easing short-term inflation expectations.
Key Takeaways
- 1.The Reserve Bank of Australia kept its cash rate unchanged at 4.35% with a 'hawkish hold' posture, narrowing the conditions for future hikes as inflation and labour data moderate.
- 2.Westpac projects the RBA will deliver its first 25bp rate cut in August 2027, followed by cuts in November 2027 and February 2028.
- 3.New Zealand political uncertainty escalated following a leadership challenge to PM Christopher Luxon ahead of the November election, while domestic housing sales dropped to a two-year low.
Table of Contents
- Economic Insight: RBA holds at 4.35%, narrows risk of hikes
- The Week That Was: A cautious turn
- Focus on New Zealand: Political drama and mixed data
- For the week ahead
- Economic & financial forecasts
- Corporate Directory
Report data
Interest rate forecasts — as of August 14, 2026.
| Metric | Estimate | Context |
|---|---|---|
| RBA Cash Rate | 4.35% | RBA Monetary Policy Board kept the cash rate on hold at 4.35%. |
| Australia Consumer Sentiment Index | 83.9 index | Consumer sentiment rose 4.1% in July but remains in the bottom 10% of historical outcomes. |
| Australia Q1 Wage Price Index | 0.8 % QoQ | WPI rose 0.8% in Q1 2026, with annual private wage growth slowing to 3.2% YoY. |
| New Zealand House Sales | -4.6 % MoM | Fifth consecutive monthly decline in NZ house sales, hitting a two-year low. |
| New Zealand 1-Year Inflation Expectations | 2.6% | RBNZ Survey of Expectations 1-year ahead inflation expectations fell sharply. |
Reports in this series
Australia & New Zealand Weekly is shown in chronological order through this edition, published on August 17, 2026.
Part of the Australia & New Zealand Weekly series — view all 3 editions
Looking for the latest edition? WestpacWeekly20260831 (Aug 31, 2026)
- Jun 29WestpacWeekly20260629
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Authors / Editors
Reported Data Context
- RBA Cash Rate: 4.35 % (August 2026) · Source: RBA
- Australia Consumer Sentiment Index: 83.9 index (July 2026) · Source: Westpac-MI
- Australia Q1 Wage Price Index: 0.8 % QoQ (Q1 2026) · Source: ABS
- New Zealand House Sales: -4.6 % MoM (July 2026) · Source: REINZ
- New Zealand 1-Year Inflation Expectations: 2.6 % (Q3 2026) · Source: RBNZ