Westpac predicts double interest rate hike after higher-than-expected inflation figures

Westpac has updated its cash rate forecast on the back of yesterday's higher-than-expected inflation figures, and it's not good news for Australian mortgage holders.

The last of the big four to release its outlook, Westpac is now predicting the Reserve Bank of Australia (RBA) will hike interest rates by 0.50 percentage points next week.

CBA, NAB and ANZ all said yesterday they are expecting a rate rise of 0.25 percentage points when the RBA releases its figures on Tuesday.

If Westpac is right and the RBA goes back to a double hike, the average borrower with a $500,000 loan before the increases started in May could be paying $834 a month, according to RateCity.

READ MORE: Jury in Bruce Lehrmann rape trial discharged

November rate rise of 0.5 per cent

Source: RateCity.com.au

"Westpac's economic team has gone against the tide, tipping the RBA to revert back to a double hike in November," RateCity.com.au research director, Sally Tindall, said.

"If this happens, the average variable borrower with a $500,000 debt would see their repayments lift by an additional $150 per month and over $1000 across seven months' worth of rate hikes," she said.

"All four big banks have now increased their cash rate forecasts on the back of yesterday's surprise inflation figures, however, CBA, NAB and ANZ economists all still predict a standard 0.25 percentage RBA rise next week."

READ MORE: When life will actually get cheaper for Australians

November rate rise of 0.25 per cent

Source: RateCity.com.au

Annual inflation hit a high not seen in nearly 32 years yesterday as Australian households brace for greater cost of living challenges.

Fresh data from the Australian Bureau of Statistics (ABS) show that in the September quarter, the consumer price index (CPI) rose 1.8 per cent to an annual rate of 7.3 per cent.

The CPI – typically used to measure inflation in Australia – is now at an annual level not seen since 1990.