Before consumer price figures on Wednesday showed trimmed mean inflation stubbornly holding at 3.6 per cent in the 12 months to July - above consensus forecasts - all of Australia's big four banks were predicting no more rate rises this cycle.
ANZ was the first major lender to change its call, before economists at NAB and Commonwealth Bank followed suit on Thursday, making it three out of the four big banks tipping another rate hike by Melbourne Cup day.
While ANZ and CBA predict the Reserve Bank will lift the cash rate in November, NAB's Sally Auld and Gareth Spence think it will be even sooner, forecasting a hike at the central bank's next meeting in September.
Even though headline inflation slowed on an annual basis from 3.8 to 3.5 per cent, the broad-based rise in underlying inflation suggests the RBA's preferred quarterly trimmed mean measure will likely come in above one per cent in September, NAB said.
That would be materially higher than the RBA's forecast of 0.83 per cent and indicates that the upside risks to inflation - repeatedly flagged by governor Michele Bullock after the August meeting - are crystallising.
"RBA officials have been very clear in recent months that firstly, risks to their inflation forecast were tilted to the upside; and secondly, that if those risks were realised the board would respond with a rate hike," Dr Auld and Mr Spence said in a research note.
"We think it unlikely that activity data between now and the September board meeting will be weak enough to deter the board from hiking."
Household spending data released by the Australian Bureau of Statistics on Thursday showed no sign of slowing economic activity.
Spending rose 1.1 per cent in July, pushing the annual growth rate to seven per cent, far above market expectations of 5.7 per cent.
"The uptick was broad‑based, with substantial strength in discretionary categories, in particular recreation and culture and hotels, cafes and restaurants, with clothing and footwear also strong," CBA economist Ashwin Clarke said.
"Households are clearly still willing to spend despite head winds from elevated inflation, higher interest rates and falling housing prices.
"At face value today's spending data adds to the case that tighter monetary policy is needed."
There was some weakness in capital expenditure.
Figures also released on Thursday showed private capex declined 3.6 per cent in the June quarter, but that was mostly due to volatility in data centre investment.
Spending on information media and telecommunications equipment fell 53 per cent, after record investment in server racks and processing equipment for data centres drove an increase of 199.6 per cent in May, ABS head of business statistics Tom Lay said.
That doesn't mean the data centre boom is at an end. Annual growth in IT investment was still chugging along at 80 per cent.
NAB thinks the RBA might not stop at just one hike.
Minutes from the bank's last meeting released on Tuesday showed the board believes interest rates were already "somewhat restrictive", so another hike will tip monetary policy into firmly restrictive policy, NAB said.
The RBA board is also very mindful of the effect that more tightening could have on unemployment and that the rapidly deteriorating housing market will help slow the economy as well.
"However, risks are biased to a follow-up hike, especially if resilience in activity data emerges ahead of the November meeting," NAB said.
While falling house prices could drive down activity by making households less willing to spend, Thursday's figures show households have not been deterred from taking their wallets out.
June GDP data set to be released on Wednesday could prove another crucial milestone on the RBA's interest rate path.
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