Q+A: The Week Ahead with NAB | 28 Sep 2026

Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics and more. I'm Sean Aylmer. Every Monday morning, we're joined by the economics team at National Australia Bank, NAB, to look at the week ahead. Sally Auld is NAB's Chief Economist. Sally, good morning.

Good morning, Sean. Quite the week. Busy one for economists. A really big one. Yeah, it feels like we've been waiting a long time for this week, but it's now here.

So we may as well go with the biggest piece of news this week. Of course, that comes tomorrow afternoon to 30pm when the Reserve Bank makes its decision on interest rates, having deliberated today and tomorrow morning. What are they going to do?

I think it's pretty universally accepted that they're going to lift interest rates by 25 basis points tomorrow. Many Reserve Bank officials have been out and about over the last month and expressing, I think, a renewed level of concern around where inflation is sitting in the Australian economy. And that's largely because We did in August get inflation data for the month of July, and that was the first month of the third quarter. And there's a fair bit of signal in that data, and they didn't tell a very good story. And so after we saw that data, we changed our view and decided that we would forecast a rate hike in September. And I think since then, the market and the broad consensus of economists have pretty much moved to that conclusion as well.

You talk about the Reserve Bank signaling what it's going to do. So we had Michelle Bullock, the governor, the deputy governor, Andrew Hauser, Sarah Hunter, the chief economist, all of them in the last three or four weeks fairly overtly have been talking about how worried they are about inflation. Is that the sort of thing you're reading the tea leaves there? You think, wow, they're all coming out at the same time saying we're worried about inflation. They're telling us something?

Yeah, that's right. I think they were getting a message out there, you know, probably to the broader population. So we saw the deputy governor on the 7.30 report. That doesn't happen very often. So I think they were trying to get a message out there. But we have to also remember that it's not the RBA staff who make the decisions. So they will recommend that a particular outcome or decision on interest rates, and that will go in the board papers that the board members get. But of those three officials that you mentioned, the governor, the deputy governor, and the chief economist, only two of them have a vote. So the deputy governor, Andrew Hauser, and obviously the governor, Michelle Bullock, they are just two votes of a nine-person committee. And what we don't really know is what the other seven people on that committee think and whether they think the same as RBA staff. Yeah.

Yeah. Okay. Just in brief, why is inflation still a problem in the economy? I mean, apart from interest rates aren't high enough, right? What is it that's pushing inflation at the moment?

So it's lots of things. So I think the Reserve Bank have been pretty clear about saying, you know, we have a forecast that inflation is going to come down over