NAB’s revised interest rate outlook is significant because it signals a shift in how one of Australia’s major banks views the economy’s direction. Sally Auld and her team have moved away from expecting a Reserve Bank rate increase and now believe the next move is more likely to be a cut.
The change is based on expectations of a sharper-than-anticipated economic slowdown in early 2026. While NAB is not forecasting an immediate reduction in rates, the revised outlook suggests concerns about economic growth have become more prominent than concerns about further tightening monetary policy.
For mortgage holders, the forecast may offer some reassurance that borrowing costs are unlikely to rise if NAB’s assessment proves correct. More broadly, the shift highlights how economic conditions can alter expectations for interest rate policy and influence household, business and investor confidence across the Australian economy.