The Reserve Bank has kept interest rates on hold at 3.6 per cent, delivering a fresh cost of living blow to Australians with mortgages.
Tuesday's decision is the third interest rate hold in a row, and comes amid speculation the bank may be forced to hike rates again next year, with inflation coming in hotter than expected.
My Housing Market chief economist Andrew Wilson said the RBA will be forced to confront this possibility in 2026.
'Having misjudged the strength of inflation, particularly in regard to the predictable post-subsidy spike in electricity costs, the RBA will hold rates but may have some difficult decisions in 2026 if inflation keeps rising as expected and the recent modest weakening of the labour market intensifies,' he said.