David Koch reveals why the RBA may NOT raise the cash rate next month - despite all the Big Four banks warning of another hike

By CAITLIN POWELL - NEWS REPORTER and SARAH BROOKES - SENIOR REPORTER, AUSTRALIA Published: 02:19, 28 April 2026 | Updated: 02:19, 28 April 2026 David Koch has forecast the Reserve Bank will not increase interest rates next month, raising hopes for millions of Australians with a mortgage. The Compare the Market economic director's prediction contradicts the Big Four banks' expectations the Reserve Bank will hike rates at its next meeting on May 5.  ANZ, Westpac, Commonwealth Bank and NAB have previously warned the cash rate will be raised by 0.25 percentage points, bringing it up to 4.35 per cent. Koch has claimed the RBA may resist hiking rates due to the knock-on effect of the Iran war.  'Because that interest rate increase, or the equivalent, has already come through in higher petrol prices, I reckon they might hold the line,' he told the Herald Sun. 'Consumer confidence has plunged and business confidence has fallen to almost record lows. 'The Reserve Bank doesn't want to crush consumers and businesses with another interest rate increase.' The Middle East conflict has led to petrol shortages across the country and diesel prices soaring above $3 a litre, forcing the Albanese government to halve the fuel excise.  David Koch has forecast the Reserve Bank will not increase interest rates next month, raising hopes of millions of Aussies with a mortgage. According to the NRMA, the average price of regular unleaded is now at 183.2 a litre, while the average diesel price is now at 253.6 cents per litre. If the interest rate is increased just 0.25 percentage points, that could mean mortgage holders will be paying a further $157 a month on a $1million loan, according to Compare the Market. One economic expert told Daily Mail there will be a perfect storm of fresh inflation and interest rate figures colliding with the Federal Budget on May 12 while conflict in the Middle East rumbles on. AMP chief economist Shane Oliver predicted there will be a sharp 1.5 per cent increase in monthly inflation. 'We are going to see a spike,' he said. He predicts that fuel prices jumping by around 30 per cent in March could add more than a full percentage point to inflation, lifting it past five per cent year-on-year and forcing the RBA to raise rates. 'It seems that it is not just higher fuel prices and fuel levies that are on the way up, but everything from airfares to toilets,' he said. '(But) it was welcome news to see the federal government moving to rein in the rapid growth in spending on the NDIS. The Reserve Bank of Australia's inflation target is between two and three per cent (stock image) 'Government spending has been a major reason behind Australia's cost of living and inflation problem and the blowout in spending on the NDIS has been part of that.' The Consumer Price Index (CPI) was 3.7 per cent in the 12 months to February, down slightly from 3.8 per cent in January. Trimmed mean inflation - which excludes volatile items to provide a clearer picture of underlying price pressures - was unchanged at 3.3 per cent. The Reserve Bank of Australia's inflation target is between two and three per cent. Oliver has cautioned that inflation risks are not just coming from within Australia, adding that there is still a 'significant risk' the Iran war could re-escalate if agreement on a deal is not reached soon. 'Trump's demeaning and humiliating social media posts may also be encouraging Iran to dig in,' he said. 'The key thing to watch remains the Strait of Hormuz and, despite a brief spike in ship traffic a week ago, it remains effectively closed. 'While a bout of mild stagflation is baked in, the clock is now ticking on whether this turns into a more severe bout like that seen in the 1970s.' The 1970s fuel crisis consisted of two major supply shocks: In 1973, an embargo was issued by Arab oil producers on Western nations supporting Israel during the Yom Kippur War.  A second crisis in 1979 was prompted by the Iranian Revolution.  The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.