Home topics news Reserve Bank of Australia. Source: RBA News News RBA’s next rate hike is likely in May as capacity pressures remain elevated Yajush Gupta February 11, 2026 Business conditions eased to long-run average levels in January whilst inflation pressures persist, according to CreditorWatch Chief Economist Ivan Colhoun’s analysis of the latest NAB survey. What’s happening : Business conditions eased to plus seven in January from plus nine, whilst consumer sentiment fell 2.6 per cent to 90.5 in February following the Reserve Bank of Australia’s 25 basis point interest rate hike. Why this matters : Australian businesses face ongoing inflation pressures despite easing capacity utilisation, suggesting the economy isn’t overheating. Employment intentions remain healthy at plus five, but consumer sentiment sits in pessimistic territory. Australian businesses are sending mixed signals about the economy’s direction, with the latest surveys revealing what CreditorWatch Chief Economist Ivan Colhoun describes as “a lot more noise than signal” in January’s results. Business conditions eased modestly to plus seven from plus nine in January, according to the NAB Business Survey released today, returning to the long-run average level. However, Colhoun says this reading is consistent with an economy broadly growing around trend, not rolling over. “Business conditions, along with job advertisements, my favourite indicator of the Australian economy, edged two points lower to the plus seven long-term average level in January,” says Colhoun in his economic brief analysing the survey. “This is consistent with an economy broadly growing around trend.” Inflation pressures persist The inflation