HSBC: The RBA is expected to further raise interest rates by 25 basis points in December and may pause interest rate hikes in February next year

HSBC chief economist Paul Bloxham said in a note that the RBA is likely to remain focused on high inflation and raise the cash rate by a further 25 basis points to 3.1% in December.

Bloxham said the recent spate of rate hikes was continuing to weaken Australia’s property market. Consumer confidence also fell to its lowest level since the worst of the COVID-19 pandemic and the previous recession of the 1990s.

HSBC expects Australia’s economic growth to slow further in the coming months, with the RBA likely to respond by pausing rate hikes in February next year.