What September’s inflation and jobs figures mean for lending, and how prices and jobs reach a loan book, graded by 33 years of data.
· 19 min read
General information, not legal or financial advice.
In short
September.Prices rose 4.3% over the year, 3.6% underlying. Unemployment was 4.7%, up 0.3 points on a year. The cash rate is 4.85% after five rises this year, the latest on 3 November.
Jobs are the strongest link to loan books. When unemployment rises, home-loan arrears rise the same year and business credit is about 8% lower within a year. It also pulls the cash rate down: with unemployment rising, a rate rise came next in only 3 of 23 quarters.
Prices reach borrowers through the cash rate. With underlying inflation above 3%, a rate rise has come the next quarter 18 times in 31 quarters since 1993; below 2%, never. Mortgage rates follow within the quarter; arrears and insolvencies about a year later.
A squeeze on essentials, on its own, has not raised arrears or insolvencies. After runs of rent and power outpacing prices, arrears, insolvencies and card debt did no worse than in similar quarters without one. Food is the one squeeze to watch.
Watch the 19 Nov jobs figures more than the 25 Nov CPI.
Sources: ABS, CPI, released 28 October 2026; ABS, Labour Force, released 15 October 2026; RBA cash rate target, from 4 November 2026. Every figure below carries its source and date.
September’s figures
Prices, year to September4.3%4.0% in August
Underlying (trimmed mean)3.6%target 2 to 3%
Unemployment4.7%4.4% a year earlier
Cash rate4.85%five rises in 2026, the latest 3 Nov
Prices rose 0.8% in September alone. Over the year, fuel rose 23.6% and electricity 12.8% as rebates ended; together they added 1.1 points of the 4.3%. Essentials, the things households cannot easily cut, rose 5.2% over the year to September, discretionary spending 3.2%.
Prices rose 4.3% over the year to September, above the 2–3% target for a yearConsumer prices and the trimmed mean (underlying inflation), change on a year earlier, April 2025 to September 2026.
Fuel, electricity, tobacco and water rose more than twice as fast as pricesPrice change over the year to the September quarter 2026, by item. Orange: faster than prices overall; the dashed line is the CPI, 3.9%.
Faster than prices overall
Slower
Automotive fuel12.3%+12.3% automotive fuel, year to the September quarter 2026. Faster than prices overall (+3.9%), by 8.4 points.
Electricity10.6%+10.6% electricity, year to the September quarter 2026. Faster than prices overall (+3.9%), by 6.7 points.
Tobacco10.3%+10.3% tobacco, year to the September quarter 2026. Faster than prices overall (+3.9%), by 6.3 points.
Water and sewerage10.2%+10.2% water and sewerage, year to the September quarter 2026. Faster than prices overall (+3.9%), by 6.3 points.
Council rates and charges6.0%+6.0% council rates and charges, year to the September quarter 2026. Faster than prices overall (+3.9%), by 2.1 points.
New homes (building costs)5.3%+5.3% new homes (building costs), year to the September quarter 2026. Faster than prices overall (+3.9%), by 1.3 points.
Insurance5.1%+5.1% insurance, year to the September quarter 2026. Faster than prices overall (+3.9%), by 1.1 points.
Child care5.0%+5.0% child care, year to the September quarter 2026. Faster than prices overall (+3.9%), by 1.1 points.
Medical and hospital services5.0%+5.0% medical and hospital services, year to the September quarter 2026. Faster than prices overall (+3.9%), by 1.0 point.
Meals out and takeaway4.2%+4.2% meals out and takeaway, year to the September quarter 2026. Faster than prices overall (+3.9%), by 0.2 points.
Rents3.6%+3.6% rents, year to the September quarter 2026. Slower than prices overall (+3.9%), by 0.4 points.
Food and drinks3.1%+3.1% food and drinks, year to the September quarter 2026. Slower than prices overall (+3.9%), by 0.8 points.
Gas2.7%+2.7% gas, year to the September quarter 2026. Slower than prices overall (+3.9%), by 1.2 points.
Communication2.1%+2.1% communication, year to the September quarter 2026. Slower than prices overall (+3.9%), by 1.8 points.
Buying a car0.8%+0.8% buying a car, year to the September quarter 2026. Slower than prices overall (+3.9%), by 3.1 points.
0%5%10%15%
Source: ABS, Consumer Price Index, Australia, September 2026 (quarterly series, eight capital cities), released 28 October 2026. Creditcrest calculations.
Show the numbers
Item
Year to Sep qtr 2026, %
Automotive fuel
+12.3
Electricity
+10.6
Tobacco
+10.3
Water and sewerage
+10.2
Council rates and charges
+6.0
New homes (building costs)
+5.3
Insurance
+5.1
Child care
+5.0
Medical and hospital services
+5.0
Meals out and takeaway
+4.2
Rents
+3.6
Food and drinks
+3.1
Gas
+2.7
Communication
+2.1
Buying a car
+0.8
All groups CPI
+3.9
Taking the September quarter as a whole, prices were 3.9% higher than a year earlier. Wages grew 3.2% over the year to June, while essentials rose 4.6%. Cost of living by household shows how much faster prices rose for the lowest-income households.
Unemployment has risen 0.3 points in a year, to 4.7%Share of the labour force, seasonally adjusted, January 2022 to September 2026.
Unemployment rose 0.1 points in September. In trend terms it is 4.6%, 0.3 points higher than a year earlier, and 6.3% of the labour force are in work but want more hours. It rose most in Tasmania and the Northern Territory.
By state
State
Unemployment (trend)
Change on a year, points
Capital-city prices, year to September
New home loans, year to June quarter
NSW
4.5%
+0.4
4.3%
+1.6%
VIC
5.1%
+0.4
4.0%
+3.1%
QLD
4.5%
+0.3
4.4%
+11.3%
SA
4.3%
−0.1
5.0%
+12.4%
WA
4.3%
+0.1
4.5%
+13.6%
TAS
5.2%
+1.1
5.3%
+27.9%
NT
4.8%
+0.5
5.2%
+12.4%
ACT
4.2%
+0.1
4.7%
+13.4%
Australia
4.6%
+0.3
4.3%
+6.8%
ABS Labour Force (trend, as the ABS advises for comparing states), CPI (September) and Lending Indicators (new home loans excluding refinancing, year to the June quarter).
How prices and jobs reach a loan book
We tested each link with official data from 1993, both ways, and graded it by one rule: strong where it held in at least two-thirds of the checks and not the other way round; some where it showed but not always; not found where it did not show. Unemployment and inflation pull the cash rate in opposite directions. In 2026 inflation won: five rises while unemployment edged up, the latest on 3 November, to 4.85%.
Jobs and the cash rate carry prices to loan books; a squeeze on essentials, on its own, mostly does notEach arrow is graded by the evidence. Hover over, tab to or tap an arrow or a box for the detail; the same links follow in words.
Strong evidence
Some evidence
Tested, not found
Tested, not found
Cash rate risesless business credit
Unemployment risesmore insolvencies
Inflation on its owncredit or arrears
Rent and power outpace pricesarrears, insolvencies or card debt
With underlying inflation above 3%, the next quarter brought a rise 18 times in 31 quarters since 1993; below 2%, never (28 quarters). Crises override it: in 2008 the Reserve Bank cut with inflation above 4%.
Unemployment rises → Cash rate cut
Strong
Next quarter
About 0.2 points off the cash rate in the next quarter for each point unemployment rose over the year. With unemployment rising, a rise came next only 3 times in 23 quarters.
Cash rate → Mortgage rates
Strong
Same quarter
Banks’ standard variable rate moved 0.95 points per point of cash rate, 1993–2026. In 2022–23 the cash rate rose 4.25 points and the standard variable rate 4.25; the rate existing borrowers pay rose 3.50 points. Card rates barely moved (up 0.19 points).
Cash rate rises → Home lending slows
Strong
Within a year
Owner-occupier credit about 2.3% lower a year after a 1-point rise, and 4.6% lower after two (1993–2019).
Cash rate rises → Home-loan arrears rise
Some
About a year later
About 0.06 points more housing loans non-performing per point, four quarters on (2020–26). Clear after the 2009–10 and 2022–23 rises; in 2008–09 arrears rose while rates were cut, because jobs were lost.
Cash rate rises → Personal insolvencies rise
Some
A year to 18 months
About 1.8% more people entering a personal insolvency for each point on the cash rate a year earlier (2008–26). Most of the evidence is 2023, when insolvencies rose 24% on a year.
Cash rate rises → Business credit falls
Not found
Not found
Business credit grew faster after rate rises, about 4.6% more within a year per point, because both come in booms.
Unemployment rises → Home-loan arrears rise
Strong
Same year
About 0.09 points more housing loans non-performing for each point of unemployment (2020–26), and 0.06 points more loans 90 days or more behind (2005–26).
Unemployment rises → Business credit falls
Strong
Within a year
About 8% lower a year after a 1-point jump in unemployment, and 13% lower after two (1993–2019, with or without 2008–09).
Unemployment rises → Personal insolvencies rise
Not found
Not found
No clear link in 2008–26, nationally or across the six states, once the 2019 reforms and COVID relief are set aside.
Inflation, on its own → Credit or arrears
Not found
Not found
Beyond what comes through the cash rate, inflation has shown no consistent effect on credit or arrears (1993–2026): where one test found a small effect, another found the opposite.
Rent and power outpace prices → Arrears, insolvencies or card debt rise
Not found
Not found
After runs of rent and power outpacing prices, none of these rose more than in similar quarters without one.
Essentials outpace wages → Arrears or insolvencies rise
Not found
Not found
Six runs of three quarters or more since 2006: no clear effect on arrears, insolvencies or card debt.
Food outpaces prices → Personal insolvencies rise
Some
The next year
About 2.3% more insolvencies the next year for each point by which food outpaced prices, in every national check, but not across states.
Fuel outpaces prices → Personal credit slows
Some
The next year
About 0.17% slower personal credit growth the next year for each point by which fuel outpaced prices over a year; it fades once wages are held.
Arrow by arrow
Inflation above targetCash rate risesSome
Next quarter. With underlying inflation above 3%, the next quarter brought a rise 18 times in 31 quarters since 1993; below 2%, never (28 quarters). Crises override it: in 2008 the Reserve Bank cut with inflation above 4%. Our earlier test found the response clear from 2015.
Unemployment risesCash rate cutStrong
Next quarter. About 0.2 points off the cash rate in the next quarter for each point unemployment rose over the year. With unemployment rising, a rise came next only 3 times in 23 quarters.
Cash rateMortgage ratesStrong
Same quarter. Banks’ standard variable rate moved 0.95 points per point of cash rate, 1993–2026. In 2022–23 the cash rate rose 4.25 points and the standard variable rate 4.25; the rate existing borrowers pay rose 3.50 points. Card rates barely moved (up 0.19 points). What drives credit and house prices found the same pass-through.
Cash rate risesHome lending slowsStrong
Within a year. Owner-occupier credit about 2.3% lower a year after a 1-point rise, and 4.6% lower after two (1993–2019).
Cash rate risesHome-loan arrears riseSome
About a year later. About 0.06 points more housing loans non-performing per point, four quarters on (2020–26). Clear after the 2009–10 and 2022–23 rises; in 2008–09 arrears rose while rates were cut, because jobs were lost. Our earlier piece found arrears follow rates by four quarters.
Cash rate risesPersonal insolvencies riseSome
A year to 18 months. About 1.8% more people entering a personal insolvency for each point on the cash rate a year earlier (2008–26). Most of the evidence is 2023, when insolvencies rose 24% on a year.
Cash rate risesBusiness credit fallsNot found
Not found. Business credit grew faster after rate rises, about 4.6% more within a year per point, because both come in booms.
Unemployment risesHome-loan arrears riseStrong
Same year. About 0.09 points more housing loans non-performing for each point of unemployment (2020–26), and 0.06 points more loans 90 days or more behind (2005–26). Our earlier piece found 0.10 points; What moves each credit product ranks unemployment first for arrears on every product.
Unemployment risesBusiness credit fallsStrong
Within a year. About 8% lower a year after a 1-point jump in unemployment, and 13% lower after two (1993–2019, with or without 2008–09).
Unemployment risesPersonal insolvencies riseNot found
Not found. No clear link in 2008–26, nationally or across the six states, once the 2019 reforms and COVID relief are set aside.
Inflation, on its ownCredit or arrearsNot found
Not found. Beyond what comes through the cash rate, inflation has shown no consistent effect on credit or arrears (1993–2026): where one test found a small effect, another found the opposite. Our earlier piece found the same for arrears.
Rent and power outpace pricesArrears, insolvencies or card debt riseNot found
Not found. After runs of rent and power outpacing prices, none of these rose more than in similar quarters without one. Cost of living by household shows who feels these prices most.
Essentials outpace wagesArrears or insolvencies riseNot found
Not found. Six runs of three quarters or more since 2006: no clear effect on arrears, insolvencies or card debt.
The next year. About 2.3% more insolvencies the next year for each point by which food outpaced prices, in every national check, but not across states.
Fuel outpaces pricesPersonal credit slowsSome
The next year. About 0.17% slower personal credit growth the next year for each point by which fuel outpaced prices over a year; it fades once wages are held.
1. What moves the cash rate
The Reserve Bank raises the cash rate when inflation runs above its 2 to 3% target and cuts when unemployment rises. In the data, the second is the steadier rule. Rising unemployment has pulled the cash rate down in the next quarter, by about 0.2 points for each point it rose over the year, in every period we tested. Inflation’s pull is real but crises override it: the Bank cut in 2008 with inflation above 4%, and held until May 2022 while inflation rose.
The rise on 3 November, to 4.85%, came after a quarter in which both pulled: in the September quarter 2026 underlying inflation was above 3% and unemployment was 0.3 points higher than a year before. Of the 9 quarters like it since 1993, 3 were followed by a rise, 3 by a cut and 3 by no change.
Inflation above 3% has usually brought a rise in the next quarter; rising unemployment, a cutWhat the cash rate did in the quarter after, by underlying inflation (trimmed mean, over the year) and by the change in unemployment over the year (falling or rising by 0.3 points or more), 1993–2026.
Rise next quarter
No change
Cut next quarter
Inflation below 2%28 quarters0% riseInflation below 2%: 28 quarters. The next quarter brought a rise 0 times, a cut 8 times and no change 20 times. 1993–2026.
Inflation 2 to 3%75 quarters24% riseInflation 2 to 3%: 75 quarters. The next quarter brought a rise 18 times, a cut 24 times and no change 33 times. 1993–2026.
Inflation above 3%31 quarters58% riseInflation above 3%: 31 quarters. The next quarter brought a rise 18 times, a cut 6 times and no change 7 times. 1993–2026.
Unemployment falling61 quarters36% riseUnemployment falling: 61 quarters. The next quarter brought a rise 22 times, a cut 4 times and no change 35 times. 1993–2026.
Unemployment steady50 quarters22% riseUnemployment steady: 50 quarters. The next quarter brought a rise 11 times, a cut 25 times and no change 14 times. 1993–2026.
Unemployment rising23 quarters13% riseUnemployment rising: 23 quarters. The next quarter brought a rise 3 times, a cut 9 times and no change 11 times. 1993–2026.
Sources: RBA tables F1.1 (cash rate target) and G1 (trimmed mean); ABS Labour Force. A rise or cut is a change of 0.1 point or more in the quarter’s average cash rate. Creditcrest calculations.
Show the numbers
Conditions
Quarters
Rise next
No change
Cut next
Inflation below 2%
28
0
20
8
Inflation 2 to 3%
75
18
33
24
Inflation above 3%
31
18
7
6
Unemployment falling
61
22
35
4
Unemployment steady
50
11
14
25
Unemployment rising
23
3
11
9
2. Lenders pass it on within the quarter
Variable mortgage rates move with the cash rate, almost point for point, in the same quarter. Card rates do not: they barely moved through the 4.25 points of rises in 2022–23. So a rate rise reaches a borrower first through the mortgage, then through everything a higher repayment crowds out.
This year’s first three rises have been passed on in full: from the December quarter 2025 to the September quarter 2026 the cash rate averaged 0.75 points more and banks’ standard variable rate 0.75 points more, while card rates rose 0.08 points. The rises of 29 September and 3 November add 0.50 points more; on past form, variable mortgage rates follow within the quarter.
Mortgage rates move with the cash rate within the quarter; card rates barely moveCash rate, banks’ standard variable rate for owner-occupier home loans and the standard credit card rate, quarterly average, 1993 to September 2026.
Cash rate
Standard variable home-loan rate
Credit card rate
Sources: RBA tables F1.1 and F5, published 2 November 2026 and 8 October 2026.
Show the numbers
Quarter
Cash rate, %
Standard variable, %
Card rate, %
Mar qtr 1993
5.70
9.92
19.51
Jun qtr 1993
5.25
9.57
19.37
Sep qtr 1993
4.91
9.30
18.52
Dec qtr 1993
4.75
8.75
16.68
Mar qtr 1994
4.75
8.75
14.55
Jun qtr 1994
4.75
8.75
14.47
Sep qtr 1994
5.12
8.85
14.43
Dec qtr 1994
6.45
9.63
14.77
Mar qtr 1995
7.50
10.56
16.64
Jun qtr 1995
7.50
10.54
16.81
Sep qtr 1995
7.50
10.49
16.81
Dec qtr 1995
7.50
10.48
16.81
Mar qtr 1996
7.50
10.48
16.81
Jun qtr 1996
7.50
10.29
16.81
Sep qtr 1996
7.16
9.60
16.79
Dec qtr 1996
6.58
8.88
16.48
Mar qtr 1997
6.00
7.78
15.95
Jun qtr 1997
5.79
7.27
15.95
Sep qtr 1997
5.15
6.84
15.56
Dec qtr 1997
5.00
6.74
15.30
Mar qtr 1998
5.00
6.74
15.30
Jun qtr 1998
5.00
6.74
15.30
Sep qtr 1998
5.00
6.74
15.30
Dec qtr 1998
4.92
6.67
15.30
Mar qtr 1999
4.75
6.52
15.30
Jun qtr 1999
4.75
6.52
15.30
Sep qtr 1999
4.75
6.55
15.30
Dec qtr 1999
4.91
6.70
15.30
Mar qtr 2000
5.33
7.13
15.43
Jun qtr 2000
5.90
7.72
16.23
Sep qtr 2000
6.16
7.98
16.57
Dec qtr 2000
6.25
8.07
16.70
Mar qtr 2001
5.88
7.65
16.51
Jun qtr 2001
5.02
6.82
16.05
Sep qtr 2001
4.93
6.74
15.99
Dec qtr 2001
4.43
6.24
15.79
Mar qtr 2002
4.25
6.07
15.51
Jun qtr 2002
4.47
6.32
15.76
Sep qtr 2002
4.75
6.57
16.01
Dec qtr 2002
4.75
6.57
16.01
Mar qtr 2003
4.75
6.57
16.01
Jun qtr 2003
4.75
6.57
16.01
Sep qtr 2003
4.75
6.57
16.01
Dec qtr 2003
4.98
6.82
16.26
Mar qtr 2004
5.25
7.07
16.51
Jun qtr 2004
5.25
7.07
16.51
Sep qtr 2004
5.25
7.07
16.51
Dec qtr 2004
5.25
7.07
16.51
Mar qtr 2005
5.33
7.15
16.61
Jun qtr 2005
5.50
7.32
16.80
Sep qtr 2005
5.50
7.32
16.80
Dec qtr 2005
5.50
7.32
16.80
Mar qtr 2006
5.50
7.32
16.80
Jun qtr 2006
5.66
7.49
16.98
Sep qtr 2006
5.91
7.74
17.24
Dec qtr 2006
6.15
7.99
17.53
Mar qtr 2007
6.25
8.07
17.64
Jun qtr 2007
6.25
8.07
17.73
Sep qtr 2007
6.40
8.24
18.01
Dec qtr 2007
6.65
8.49
18.44
Mar qtr 2008
6.98
9.02
19.03
Jun qtr 2008
7.25
9.45
19.52
Sep qtr 2008
7.17
9.53
19.83
Dec qtr 2008
5.29
7.64
19.35
Mar qtr 2009
3.62
6.17
18.24
Jun qtr 2009
3.02
5.77
17.96
Sep qtr 2009
3.00
5.78
17.96
Dec qtr 2009
3.48
6.32
18.46
Mar qtr 2010
3.83
6.72
18.85
Jun qtr 2010
4.40
7.31
19.44
Sep qtr 2010
4.50
7.39
19.52
Dec qtr 2010
4.66
7.66
19.69
Mar qtr 2011
4.75
7.79
19.77
Jun qtr 2011
4.75
7.79
19.77
Sep qtr 2011
4.75
7.79
19.69
Dec qtr 2011
4.52
7.55
19.69
Mar qtr 2012
4.25
7.36
19.69
Jun qtr 2012
3.85
7.09
19.66
Sep qtr 2012
3.50
6.83
19.59
Dec qtr 2012
3.18
6.57
19.59
Mar qtr 2013
3.00
6.44
19.56
Jun qtr 2013
2.85
6.27
19.55
Sep qtr 2013
2.60
6.01
19.55
Dec qtr 2013
2.50
5.93
19.59
Mar qtr 2014
2.50
5.93
19.61
Jun qtr 2014
2.50
5.93
19.65
Sep qtr 2014
2.50
5.93
19.77
Dec qtr 2014
2.50
5.93
19.77
Mar qtr 2015
2.34
5.76
19.77
Jun qtr 2015
2.10
5.53
19.77
Sep qtr 2015
2.00
5.46
19.77
Dec qtr 2015
2.00
5.57
19.77
Mar qtr 2016
2.00
5.63
19.77
Jun qtr 2016
1.84
5.47
19.77
Sep qtr 2016
1.59
5.30
19.77
Dec qtr 2016
1.50
5.26
19.77
Mar qtr 2017
1.50
5.27
19.77
Jun qtr 2017
1.50
5.27
19.77
Sep qtr 2017
1.50
5.22
19.77
Dec qtr 2017
1.50
5.22
19.77
Mar qtr 2018
1.50
5.22
19.77
Jun qtr 2018
1.50
5.22
19.77
Sep qtr 2018
1.50
5.25
19.77
Dec qtr 2018
1.50
5.34
19.77
Mar qtr 2019
1.50
5.37
19.77
Jun qtr 2019
1.43
5.30
19.83
Sep qtr 2019
1.01
4.94
19.91
Dec qtr 2019
0.75
4.80
19.94
Mar qtr 2020
0.64
4.71
19.94
Jun qtr 2020
0.25
4.52
19.94
Sep qtr 2020
0.25
4.52
19.94
Dec qtr 2020
0.15
4.52
19.94
Mar qtr 2021
0.10
4.52
19.94
Jun qtr 2021
0.10
4.52
19.94
Sep qtr 2021
0.10
4.52
19.94
Dec qtr 2021
0.10
4.52
19.94
Mar qtr 2022
0.10
4.52
19.94
Jun qtr 2022
0.39
4.85
19.94
Sep qtr 2022
1.78
6.27
19.94
Dec qtr 2022
2.82
7.27
19.94
Mar qtr 2023
3.31
7.77
19.86
Jun qtr 2023
3.83
8.27
19.82
Sep qtr 2023
4.10
8.52
19.84
Dec qtr 2023
4.25
8.69
20.00
Mar qtr 2024
4.35
8.77
20.13
Jun qtr 2024
4.35
8.77
20.30
Sep qtr 2024
4.35
8.77
20.64
Dec qtr 2024
4.35
8.77
20.78
Mar qtr 2025
4.23
8.64
20.99
Jun qtr 2025
3.99
8.39
20.99
Sep qtr 2025
3.72
8.10
20.99
Dec qtr 2025
3.60
8.02
20.99
Mar qtr 2026
3.80
8.27
20.99
Jun qtr 2026
4.25
8.69
20.99
Sep qtr 2026
4.35
8.77
21.07
3. Then arrears and insolvencies, about a year later
Home-loan arrears have risen about a year after rate rises: after 2009–10 and after 2022–23. The 2008–09 crisis went the other way, as rates were cut while jobs were lost and arrears rose. So we grade the link “some”. Unemployment is the steadier driver: arrears rise in the same year it does.
If that pattern holds, this year’s rises, 1.25 points from February to November, would show in home-loan arrears through 2027.
Home-loan arrears rose about a year after the rate rises of 2009–10 and 2022–23Top: cash rate, quarterly average. Bottom: banks’ loans 90 days or more behind but well secured (mostly home loans), and housing loans non-performing (from 2019), per cent of loans; Sep qtr 2004 to Jun qtr 2026. Shaded: quarters when the cash rate rose.
Cash rate
Loans 90+ days behind (mostly home loans)
Housing loans non-performing
Rate rising
Cash rate
Arrears
Sources: RBA table F1.1; APRA, Quarterly ADI Performance Statistics and Quarterly ADI Property Exposures, June 2026, published 17 September 2026. APRA changed its measure in March 2022; the 90-day series is joined there with no change (a gap of 0.11 points).
Show the numbers
Quarter
Cash rate, %
90+ days behind, %
Housing non-performing, %
Sep qtr 2004
5.25
0.27
—
Dec qtr 2004
5.25
0.26
—
Mar qtr 2005
5.33
0.30
—
Jun qtr 2005
5.50
0.29
—
Sep qtr 2005
5.50
0.27
—
Dec qtr 2005
5.50
0.28
—
Mar qtr 2006
5.50
0.31
—
Jun qtr 2006
5.66
0.34
—
Sep qtr 2006
5.91
0.30
—
Dec qtr 2006
6.15
0.30
—
Mar qtr 2007
6.25
0.36
—
Jun qtr 2007
6.25
0.33
—
Sep qtr 2007
6.40
0.30
—
Dec qtr 2007
6.65
0.28
—
Mar qtr 2008
6.98
0.31
—
Jun qtr 2008
7.25
0.35
—
Sep qtr 2008
7.17
0.37
—
Dec qtr 2008
5.29
0.45
—
Mar qtr 2009
3.62
0.52
—
Jun qtr 2009
3.02
0.53
—
Sep qtr 2009
3.00
0.52
—
Dec qtr 2009
3.48
0.55
—
Mar qtr 2010
3.83
0.57
—
Jun qtr 2010
4.40
0.60
—
Sep qtr 2010
4.50
0.61
—
Dec qtr 2010
4.66
0.62
—
Mar qtr 2011
4.75
0.68
—
Jun qtr 2011
4.75
0.69
—
Sep qtr 2011
4.75
0.60
—
Dec qtr 2011
4.52
0.58
—
Mar qtr 2012
4.25
0.58
—
Jun qtr 2012
3.85
0.56
—
Sep qtr 2012
3.50
0.52
—
Dec qtr 2012
3.18
0.52
—
Mar qtr 2013
3.00
0.52
—
Jun qtr 2013
2.85
0.51
—
Sep qtr 2013
2.60
0.47
—
Dec qtr 2013
2.50
0.46
—
Mar qtr 2014
2.50
0.46
—
Jun qtr 2014
2.50
0.46
—
Sep qtr 2014
2.50
0.43
—
Dec qtr 2014
2.50
0.42
—
Mar qtr 2015
2.34
0.44
—
Jun qtr 2015
2.10
0.43
—
Sep qtr 2015
2.00
0.40
—
Dec qtr 2015
2.00
0.40
—
Mar qtr 2016
2.00
0.43
—
Jun qtr 2016
1.84
0.44
—
Sep qtr 2016
1.59
0.42
—
Dec qtr 2016
1.50
0.42
—
Mar qtr 2017
1.50
0.45
—
Jun qtr 2017
1.50
0.46
—
Sep qtr 2017
1.50
0.45
—
Dec qtr 2017
1.50
0.45
—
Mar qtr 2018
1.50
0.48
—
Jun qtr 2018
1.50
0.49
—
Sep qtr 2018
1.50
0.49
—
Dec qtr 2018
1.50
0.49
—
Mar qtr 2019
1.50
0.52
0.87
Jun qtr 2019
1.43
0.55
0.93
Sep qtr 2019
1.01
0.55
0.92
Dec qtr 2019
0.75
0.54
0.90
Mar qtr 2020
0.64
0.55
0.94
Jun qtr 2020
0.25
0.69
1.11
Sep qtr 2020
0.25
0.68
1.06
Dec qtr 2020
0.15
0.65
1.01
Mar qtr 2021
0.10
0.67
1.04
Jun qtr 2021
0.10
0.66
1.01
Sep qtr 2021
0.10
0.60
0.91
Dec qtr 2021
0.10
0.54
0.82
Mar qtr 2022
0.10
0.54
0.82
Jun qtr 2022
0.39
0.51
0.78
Sep qtr 2022
1.78
0.47
0.71
Dec qtr 2022
2.82
0.45
0.68
Mar qtr 2023
3.31
0.47
0.72
Jun qtr 2023
3.83
0.50
0.76
Sep qtr 2023
4.10
0.52
0.81
Dec qtr 2023
4.25
0.55
0.86
Mar qtr 2024
4.35
0.60
0.96
Jun qtr 2024
4.35
0.62
1.04
Sep qtr 2024
4.35
0.62
1.06
Dec qtr 2024
4.35
0.62
1.05
Mar qtr 2025
4.23
0.63
1.08
Jun qtr 2025
3.99
0.62
1.07
Sep qtr 2025
3.72
0.59
1.04
Dec qtr 2025
3.60
0.56
0.99
Mar qtr 2026
3.80
0.57
0.99
Jun qtr 2026
4.25
0.58
1.01
Personal insolvencies follow rates too, a year to 18 months on, about 1.8% more for each point on the cash rate. The evidence is mostly one episode, 2023. They have not tracked unemployment once the 2019 reforms and COVID relief are set aside. Our earlier piece found a region’s insolvency rate is a good guide to its next year.
Personal insolvencies rose 24% in the year to September 2023, after the rate risesPeople entering a new personal insolvency each quarter: bankruptcies, debt agreements and personal insolvency agreements, September quarter 2007 to June quarter 2026. Shaded: the 2019 debt agreement reform and the COVID relief of 2020–21, which the tests leave out.
After unemployment jumps a point in a quarter, it keeps rising for about a year and the cash rate is cut. Through all that, business credit falls: about 8% lower after a year and 13% after two, with or without 2008–09 and in data from 1998. Housing credit does not fall nationally, because lower rates pull the other way. Across states, where the cash rate is the same for all, it shows: a point more unemployment has meant 2.5% slower new owner-occupier lending and 4.8% slower investor lending the next year.
Business credit is about 8% lower a year after unemployment jumps; housing credit is notChange in the stock of each kind of credit after a 1-point rise in unemployment within a quarter, per cent, by quarters after; 1993–2019. Shaded: business credit’s 90% range. Housing credit holds up because rates are cut.
Beyond what comes through the cash rate, inflation has not moved lending or arrears. A model fitted to 1993–2019 that leaned on inflation expected owner-occupier credit to stall by 2024 and personal credit to shrink 10 to 15% a year. Neither happened, and the model did better without inflation.
A model that leaned on inflation got 2022–26 wrongCredit growth, annualised, per cent: actual (solid) and a model fitted to 1993–2019 and given the inflation, unemployment and cash rate that followed (dashed).
Credit leads. Faster home lending comes before lower unemployment and, later, higher inflation; the reverse shows little. Inflation comes before rate rises, and rate rises before arrears. Booms lift credit first and prices later; downturns cut jobs first and business credit after.
Credit moves first; prices and jobs followEach pair tested both ways: which changes first, holding where each started. A pulse runs along each direction the data shows; a crossed arrow is a direction tested and not found. Timing is evidence of direction, not proof.
Strong evidence
Some evidence
Tested, not found
Home lending and prices
Faster owner-occupier credit has come about 7 quarters before higher inflation; with inflation first, the link is weak. Across states, 10% faster home lending meant prices 0.24 points higher the next year, with the cash rate the same for all.
Home lending and jobs
A quarter of unusually fast owner-occupier credit has been followed by unemployment 0.38 points lower for each 1% of extra credit. The other way, nationally rate cuts offset it; across states, a point more unemployment has meant new home lending 2.5–4.8% slower the next year.
Prices and cash rate
Inflation has come before rate rises, not the reverse: a rate move has told us nothing about the next quarter’s inflation. Rates do bring inflation down, but over years.
Cash rate and arrears
Arrears have followed rate rises by about a year. Rising arrears have not come before rate cuts once inflation and jobs are known.
Home lending runs about 7 quarters ahead of inflationHow closely owner-occupier credit growth and underlying inflation move together (a correlation: 1 in step, 0 unrelated), each over the year, with one moved ahead of the other by up to 8 quarters, 1993–2019. Left of zero (blue): credit first. Right (grey): prices first.
Sources: RBA tables D1 and G1. Creditcrest calculations. Correlation describes; it does not by itself show cause.
Show the numbers
Which moves first
Correlation
Credit 8 quarters ahead
0.54
Credit 7 quarters ahead
0.55
Credit 6 quarters ahead
0.53
Credit 5 quarters ahead
0.50
Credit 4 quarters ahead
0.46
Credit 3 quarters ahead
0.41
Credit 2 quarters ahead
0.37
Credit 1 quarter ahead
0.33
Same quarter
0.31
Prices 1 quarter ahead
0.29
Prices 2 quarters ahead
0.26
Prices 3 quarters ahead
0.22
Prices 4 quarters ahead
0.18
Prices 5 quarters ahead
0.15
Prices 6 quarters ahead
0.12
Prices 7 quarters ahead
0.09
Prices 8 quarters ahead
0.06
When rent and power outpace prices
Rents and electricity are about 9% of the CPI basket, more for renters. We looked at every run of quarters in which their prices rose faster than prices overall: 13 runs of two quarters or more since 1987, seven of three or more and five of four or more. The latest run of three or more began in the March quarter 2025 and lasted three quarters. Over the year to the September quarter 2026, rent and power still rose 5.3% against 3.9% for all prices.
Rent and power have outpaced prices in seven runs of three quarters or more since 1987Price change over the year: rents and electricity combined by their CPI weights, against all prices. Shaded: runs of three or more quarters in a row in which rent and power rose faster than prices, seasonally adjusted, quarter on quarter.
Rent and power
All prices (CPI)
Run of 3+ quarters
Source: ABS, Consumer Price Index (quarterly, seasonally adjusted items and weights), September 2026, released 28 October 2026. Creditcrest calculations.
Show the numbers
Quarter
Rent and power, %
CPI, %
Mar qtr 1988
10.4
6.9
Jun qtr 1988
10.5
7.1
Sep qtr 1988
10.2
7.4
Dec qtr 1988
10.1
7.6
Mar qtr 1989
9.7
6.8
Jun qtr 1989
9.2
7.6
Sep qtr 1989
8.0
8.0
Dec qtr 1989
7.6
7.8
Mar qtr 1990
6.4
8.6
Jun qtr 1990
5.8
7.7
Sep qtr 1990
4.0
6.1
Dec qtr 1990
5.0
6.9
Mar qtr 1991
4.6
4.8
Jun qtr 1991
4.2
3.4
Sep qtr 1991
4.7
3.2
Dec qtr 1991
2.4
1.5
Mar qtr 1992
2.1
1.7
Jun qtr 1992
1.5
1.2
Sep qtr 1992
1.0
0.8
Dec qtr 1992
1.2
0.3
Mar qtr 1993
1.2
1.2
Jun qtr 1993
1.3
1.9
Sep qtr 1993
1.0
2.2
Dec qtr 1993
0.9
2.0
Mar qtr 1994
0.9
1.4
Jun qtr 1994
0.9
1.8
Sep qtr 1994
0.7
1.9
Dec qtr 1994
0.5
2.5
Mar qtr 1995
0.7
3.9
Jun qtr 1995
1.2
4.5
Sep qtr 1995
1.6
5.1
Dec qtr 1995
2.0
5.0
Mar qtr 1996
2.5
3.7
Jun qtr 1996
2.4
3.1
Sep qtr 1996
2.7
2.1
Dec qtr 1996
2.8
1.5
Mar qtr 1997
2.6
1.3
Jun qtr 1997
2.7
0.3
Sep qtr 1997
2.5
−0.3
Dec qtr 1997
2.6
−0.3
Mar qtr 1998
2.6
−0.2
Jun qtr 1998
2.7
0.7
Sep qtr 1998
2.0
1.4
Dec qtr 1998
1.8
1.6
Mar qtr 1999
2.0
1.2
Jun qtr 1999
1.6
1.1
Sep qtr 1999
2.0
1.7
Dec qtr 1999
2.4
1.8
Mar qtr 2000
2.5
2.8
Jun qtr 2000
2.7
3.1
Sep qtr 2000
4.7
6.0
Dec qtr 2000
4.5
5.8
Mar qtr 2001
4.4
6.0
Jun qtr 2001
4.5
6.1
Sep qtr 2001
3.1
2.5
Dec qtr 2001
3.2
3.1
Mar qtr 2002
3.0
3.0
Jun qtr 2002
2.9
2.8
Sep qtr 2002
2.4
3.3
Dec qtr 2002
2.2
3.0
Mar qtr 2003
2.7
3.4
Jun qtr 2003
2.3
2.7
Sep qtr 2003
2.6
2.6
Dec qtr 2003
2.8
2.4
Mar qtr 2004
2.3
2.0
Jun qtr 2004
2.5
2.5
Sep qtr 2004
2.5
2.3
Dec qtr 2004
2.3
2.6
Mar qtr 2005
2.3
2.3
Jun qtr 2005
2.3
2.5
Sep qtr 2005
2.3
3.1
Dec qtr 2005
2.6
2.8
Mar qtr 2006
2.8
3.0
Jun qtr 2006
3.0
4.0
Sep qtr 2006
3.4
3.9
Dec qtr 2006
3.6
3.2
Mar qtr 2007
4.2
2.5
Jun qtr 2007
4.8
2.1
Sep qtr 2007
5.8
1.9
Dec qtr 2007
6.4
3.0
Mar qtr 2008
7.6
4.3
Jun qtr 2008
8.0
4.5
Sep qtr 2008
8.5
5.0
Dec qtr 2008
8.7
3.7
Mar qtr 2009
8.0
2.4
Jun qtr 2009
7.4
1.4
Sep qtr 2009
8.0
1.2
Dec qtr 2009
7.2
2.1
Mar qtr 2010
7.1
2.9
Jun qtr 2010
6.8
3.1
Sep qtr 2010
5.9
2.8
Dec qtr 2010
5.8
2.7
Mar qtr 2011
6.0
3.3
Jun qtr 2011
5.7
3.6
Sep qtr 2011
6.3
3.5
Dec qtr 2011
6.3
3.1
Mar qtr 2012
5.6
1.6
Jun qtr 2012
5.7
1.2
Sep qtr 2012
7.2
1.9
Dec qtr 2012
6.8
2.2
Mar qtr 2013
6.6
2.5
Jun qtr 2013
6.5
2.4
Sep qtr 2013
3.9
2.2
Dec qtr 2013
3.8
2.7
Mar qtr 2014
3.4
2.9
Jun qtr 2014
3.1
3.1
Sep qtr 2014
0.7
2.3
Dec qtr 2014
0.7
1.7
Mar qtr 2015
0.5
1.3
Jun qtr 2015
0.4
1.5
Sep qtr 2015
1.1
1.5
Dec qtr 2015
0.9
1.7
Mar qtr 2016
0.2
1.3
Jun qtr 2016
0.1
1.0
Sep qtr 2016
1.7
1.3
Dec qtr 2016
1.6
1.5
Mar qtr 2017
2.3
2.1
Jun qtr 2017
2.3
1.9
Sep qtr 2017
3.2
1.8
Dec qtr 2017
3.5
2.0
Mar qtr 2018
3.5
1.9
Jun qtr 2018
3.1
2.1
Sep qtr 2018
1.0
1.9
Dec qtr 2018
0.9
1.8
Mar qtr 2019
0.1
1.3
Jun qtr 2019
0.1
1.5
Sep qtr 2019
−0.3
1.7
Dec qtr 2019
−0.8
1.8
Mar qtr 2020
−0.3
2.2
Jun qtr 2020
−1.5
−0.3
Sep qtr 2020
−1.7
0.6
Dec qtr 2020
−3.4
0.9
Mar qtr 2021
−3.9
1.1
Jun qtr 2021
−1.6
3.8
Sep qtr 2021
−1.1
3.1
Dec qtr 2021
1.0
3.5
Mar qtr 2022
1.6
5.1
Jun qtr 2022
1.3
6.2
Sep qtr 2022
2.9
7.3
Dec qtr 2022
5.9
7.9
Mar qtr 2023
7.5
7.0
Jun qtr 2023
8.4
6.0
Sep qtr 2023
9.3
5.3
Dec qtr 2023
7.2
4.1
Mar qtr 2024
6.3
3.6
Jun qtr 2024
6.9
3.8
Sep qtr 2024
0.9
2.9
Dec qtr 2024
−1.8
2.4
Mar qtr 2025
1.2
2.4
Jun qtr 2025
1.8
2.1
Sep qtr 2025
8.1
3.2
Dec qtr 2025
8.3
3.6
Mar qtr 2026
9.9
4.1
Jun qtr 2026
7.8
3.9
Sep qtr 2026
5.3
3.9
Then we asked what followed over the next year, and compared it with the quarters most like each run, with unemployment and the cash rate moving the same way, but no run.
What followed three quarters of rent and power outpacing prices was no different from similar quartersChange over the next year. Orange: after each run; blue: the quarters most like it (by the change in unemployment and in the cash rate) that had no run. Insolvencies: each state against the other states that quarter. Each row spans twice its measure’s usual swing over a year either side of zero, so a small gap looks small.
After a run
Similar quarters, no run
Personal insolvencies17 state-runs, 2008–2025, against the other states+0.1% vs +0.3%Personal insolvencies: after 17 runs in a state’s capital (2008–2025), insolvencies over the next year rose faster than in the other states 8 times and slower 9 times: +0.1% on average, against +0.3% for quarters without a run. Over the year measure, six states.Usual swing over a year: about 13.8% either way.
Loans 90+ days behind2 runs, 2007–2023+0.03 pts vs +0.03 ptsLoans 90+ days behind: +0.03 pts over the year after these runs on average (up after 1 of 2), against +0.03 pts in the three quarters most like each that had no run. In the year before the runs: +0.02 pts.Usual swing over a year: about 0.07 pts either way.
Card debt paying interest3 runs, 2007–2025+4.7% vs +7.0%Card debt paying interest: +4.7% over the year after these runs on average (up after 3 of 3), against +7.0% in the three quarters most like each that had no run. In the year before the runs: +7.7%.Usual swing over a year: about 6.5% either way.
Personal credit6 runs, 1991–2025+3.7% vs +3.9%Personal credit: +3.7% over the year after these runs on average (up after 5 of 6), against +3.9% in the three quarters most like each that had no run. In the year before the runs: +3.3%.Usual swing over a year: about 7.1% either way.
Housing credit6 runs, 1991–2025+10.2% vs +13.4%Housing credit: +10.2% over the year after these runs on average (up after 6 of 6), against +13.4% in the three quarters most like each that had no run. In the year before the runs: +9.3%.Usual swing over a year: about 4.5% either way.
17 state-runs, 2008–2025, against the other states
Loans 90+ days behind
+0.03 pts
+0.03 pts
2 runs, 2007–2023
Card debt paying interest
+4.7%
+7.0%
3 runs, 2007–2025
Personal credit
+3.7%
+3.9%
6 runs, 1991–2025
Housing credit
+10.2%
+13.4%
6 runs, 1991–2025
Insolvencies. Across the six states, after 17 runs of three quarters (2008–2025), insolvencies over the next year rose faster than in the other states 8 times and slower 9 times. Nationally, after the five runs of two quarters since 2008, insolvencies rose in four, by 6% on average, while similar quarters saw a fall of 9%. Five runs are few: a gap that size turns up by chance about one time in four. Using every quarter instead, insolvencies more often fell afterwards.
Arrears. After the two runs since arrears data began in 2004, loans 90 days behind rose 0.03 points over the next year, the same as in similar quarters (+0.03).
Card debt and personal credit. Card debt paying interest grew 4.7% after the runs, against 7.0% in similar quarters; personal credit 3.7% against 3.9%.
Which came first. Card debt had already grown 7.7% in the year before these runs. Nothing picked up after them.
So: on its own, a squeeze from rent and power has not shown up in national arrears, insolvencies or card debt. That is evidence, not proof: two runs since 2004 is few. It lands first on renters and low-income households, whom national totals can hide, and on products with no open arrears data: small loans, buy now pay later, cards. What moves each credit product sets out why those follow rents and fuel more than the cash rate.
Other squeezes
Of eight squeezes tested, only food comes before more insolvencies, and that is not provenWhat followed runs of three or more quarters when each cost outpaced prices (essentials: also against wages): ✕ not found; “Some” where every national check agreed but the check across states or the run comparison did not; ↑ more, ↓ less.
Insolvencies
Arrears
Card debt
Personal credit
Housing credit
Rent and powerquarter on quarter
✕Rent and power outpaced prices: personal insolvencies. After 1 run of three quarters or more: +8.7% over the next year on average (up after 1 of 1), against −20.4% in similar quarters with no run. Using every quarter: −2.2% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
✕Rent and power outpaced prices: loans 90+ days behind. After 2 runs of three quarters or more: +0.03 pts over the next year on average (up after 1 of 2), against +0.03 pts in similar quarters with no run. Using every quarter: +0.01 pts the next year for each point of gap over a year. Not found.
✕Rent and power outpaced prices: card debt paying interest. After 3 runs of three quarters or more: +4.7% over the next year on average (up after 3 of 3), against +7.0% in similar quarters with no run. Using every quarter: −0.6% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
✕Rent and power outpaced prices: personal credit. After 6 runs of three quarters or more: +3.7% over the next year on average (up after 5 of 6), against +3.9% in similar quarters with no run. Using every quarter: +0.1% the next year for each point of gap over a year. Not found.
✕Rent and power outpaced prices: housing credit. After 6 runs of three quarters or more: +10.2% over the next year on average (up after 6 of 6), against +13.4% in similar quarters with no run. Using every quarter: −0.1% the next year for each point of gap over a year. Not found.
Rents alone
✕Rents outpaced prices: personal insolvencies. After 3 runs of three quarters or more: +0.5% over the next year on average (up after 2 of 3), against −0.6% in similar quarters with no run. Using every quarter: +0.7% the next year for each point of gap over a year. Not found.
✕Rents outpaced prices: loans 90+ days behind. After 4 runs of three quarters or more: −0.01 pts over the next year on average (up after 1 of 4), against −0.02 pts in similar quarters with no run. Using every quarter: 0.00 pts the next year for each point of gap over a year. Not found.
✕Rents outpaced prices: card debt paying interest. After 4 runs of three quarters or more: +1.2% over the next year on average (up after 2 of 4), against +3.5% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
✕Rents outpaced prices: personal credit. After 6 runs of three quarters or more: +3.9% over the next year on average (up after 5 of 6), against +4.2% in similar quarters with no run. Using every quarter: +0.2% the next year for each point of gap over a year. Not found.
✕Rents outpaced prices: housing credit. After 6 runs of three quarters or more: +9.0% over the next year on average (up after 6 of 6), against +11.5% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
Electricity alone
✕Electricity outpaced prices: personal insolvencies. After 2 runs of three quarters or more: +12.3% over the next year on average (up after 2 of 2), against −7.2% in similar quarters with no run. Using every quarter: −0.7% the next year for each point of gap over a year. Not found: the runs point that way, but using every quarter it went the other way.
✕Electricity outpaced prices: loans 90+ days behind. After 3 runs of three quarters or more: −0.01 pts over the next year on average (up after 2 of 3), against +0.03 pts in similar quarters with no run. Using every quarter: 0.00 pts the next year for each point of gap over a year. Not found.
✕Electricity outpaced prices: card debt paying interest. After 4 runs of three quarters or more: +2.6% over the next year on average (up after 2 of 4), against +5.0% in similar quarters with no run. Using every quarter: −0.2% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
✕Electricity outpaced prices: personal credit. After 8 runs of three quarters or more: +3.8% over the next year on average (up after 5 of 8), against +5.0% in similar quarters with no run. Using every quarter: −0.1% the next year for each point of gap over a year. Not found.
✕Electricity outpaced prices: housing credit. After 8 runs of three quarters or more: +10.9% over the next year on average (up after 8 of 8), against +12.6% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
Essentialsagainst all prices
✕Essentials outpaced prices: personal insolvencies. After 2 runs of three quarters or more: −3.1% over the next year on average (up after 1 of 2), against +9.5% in similar quarters with no run. Using every quarter: −4.6% the next year for each point of gap over a year. Not found.
✕Essentials outpaced prices: loans 90+ days behind. After 3 runs of three quarters or more: −0.01 pts over the next year on average (up after 1 of 3), against +0.02 pts in similar quarters with no run. Using every quarter: 0.00 pts the next year for each point of gap over a year. Not found.
✕Essentials outpaced prices: card debt paying interest. After 3 runs of three quarters or more: +4.4% over the next year on average (up after 3 of 3), against −4.2% in similar quarters with no run. Using every quarter: −1.6% the next year for each point of gap over a year. Not found.
✕Essentials outpaced prices: personal credit. After 3 runs of three quarters or more: +2.6% over the next year on average (up after 1 of 3), against −2.6% in similar quarters with no run. Using every quarter: −0.9% the next year for each point of gap over a year. Not found.
✕Essentials outpaced prices: housing credit. After 3 runs of three quarters or more: +7.3% over the next year on average (up after 3 of 3), against +5.0% in similar quarters with no run. Using every quarter: −0.2% the next year for each point of gap over a year. Not found.
Essentialsagainst wages
✕Essentials outpaced wages: personal insolvencies. After 4 runs of three quarters or more: −2.9% over the next year on average (up after 2 of 4), against +4.7% in similar quarters with no run. Using every quarter: −2.2% the next year for each point of gap over a year. Not found.
✕Essentials outpaced wages: loans 90+ days behind. After 4 runs of three quarters or more: +0.01 pts over the next year on average (up after 2 of 4), against +0.02 pts in similar quarters with no run. Using every quarter: +0.02 pts the next year for each point of gap over a year. Not found.
✕Essentials outpaced wages: card debt paying interest. After 4 runs of three quarters or more: −0.3% over the next year on average (up after 2 of 4), against +2.0% in similar quarters with no run. Using every quarter: −0.7% the next year for each point of gap over a year. Not found.
✕Essentials outpaced wages: personal credit. After 4 runs of three quarters or more: −1.7% over the next year on average (up after 1 of 4), against −0.1% in similar quarters with no run. Using every quarter: −0.5% the next year for each point of gap over a year. Not found.
✕Essentials outpaced wages: housing credit. After 4 runs of three quarters or more: +5.9% over the next year on average (up after 4 of 4), against +6.2% in similar quarters with no run. Using every quarter: −0.1% the next year for each point of gap over a year. Not found.
Insurance
✕Insurance outpaced prices: personal insolvencies. After 5 runs of three quarters or more: +2.1% over the next year on average (up after 4 of 5), against +5.2% in similar quarters with no run. Using every quarter: +0.3% the next year for each point of gap over a year. Not found.
✕Insurance outpaced prices: loans 90+ days behind. After 6 runs of three quarters or more: +0.05 pts over the next year on average (up after 4 of 6), against −0.01 pts in similar quarters with no run. Using every quarter: 0.00 pts the next year for each point of gap over a year. Not found.
✕Insurance outpaced prices: card debt paying interest. After 6 runs of three quarters or more: −0.3% over the next year on average (up after 2 of 6), against +2.9% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
✕Insurance outpaced prices: personal credit. After 9 runs of three quarters or more: +2.4% over the next year on average (up after 4 of 9), against +3.0% in similar quarters with no run. Using every quarter: +0.1% the next year for each point of gap over a year. Not found.
✕Insurance outpaced prices: housing credit. After 9 runs of three quarters or more: +8.2% over the next year on average (up after 9 of 9), against +8.7% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
Fuel
✕Fuel outpaced prices: personal insolvencies. After 3 runs of three quarters or more: −14.0% over the next year on average (up after 1 of 3), against −0.6% in similar quarters with no run. Using every quarter: −0.4% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
✕Fuel outpaced prices: loans 90+ days behind. After 5 runs of three quarters or more: +0.05 pts over the next year on average (up after 4 of 5), against 0.00 pts in similar quarters with no run. Using every quarter: 0.00 pts the next year for each point of gap over a year. Not found.
✕Fuel outpaced prices: card debt paying interest. After 6 runs of three quarters or more: +4.2% over the next year on average (up after 5 of 6), against +6.3% in similar quarters with no run. Using every quarter: −0.1% the next year for each point of gap over a year. Not found.
Some ↓Fuel outpaced prices: personal credit. After 8 runs of three quarters or more: +2.8% over the next year on average (up after 4 of 8), against +6.4% in similar quarters with no run. Using every quarter: −0.2% the next year for each point of gap over a year. Some evidence.
✕Fuel outpaced prices: housing credit. After 8 runs of three quarters or more: +9.0% over the next year on average (up after 8 of 8), against +10.6% in similar quarters with no run. Using every quarter: 0.0% the next year for each point of gap over a year. Not found.
Food
Some ↑Food outpaced prices: personal insolvencies. After 5 runs of three quarters or more: +3.9% over the next year on average (up after 4 of 5), against −3.2% in similar quarters with no run. Using every quarter: +2.3% the next year for each point of gap over a year. Some evidence.
✕Food outpaced prices: loans 90+ days behind. After 6 runs of three quarters or more: +0.02 pts over the next year on average (up after 3 of 6), against +0.01 pts in similar quarters with no run. Using every quarter: −0.01 pts the next year for each point of gap over a year. Not found.
✕Food outpaced prices: card debt paying interest. After 7 runs of three quarters or more: +5.1% over the next year on average (up after 5 of 7), against −0.6% in similar quarters with no run. Using every quarter: −0.2% the next year for each point of gap over a year. Not found: the runs point that way, but using every quarter shows no link.
✕Food outpaced prices: personal credit. After 11 runs of three quarters or more: +5.9% over the next year on average (up after 9 of 11), against +1.8% in similar quarters with no run. Using every quarter: +1.0% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
✕Food outpaced prices: housing credit. After 11 runs of three quarters or more: +11.1% over the next year on average (up after 11 of 11), against +8.2% in similar quarters with no run. Using every quarter: +0.4% the next year for each point of gap over a year. Not found: it went the other way, most likely shared timing.
Essentials against wages. Six runs of three quarters or more since 2006, and one under way now (four quarters to June). No clear effect on arrears, insolvencies or card debt.
Insurance. Ten runs since 1989. No clear effect.
Fuel. Ten runs since 1987. Personal credit grew more slowly afterwards, about 0.17% a year slower for each point by which fuel outpaced prices. Some evidence: it fades once wages are held.
Food. Twelve runs since 1987. Personal insolvencies rose more the next year, about 2.3% for each point by which food outpaced prices, in every national check. Across states it did not show, where food prices differ little. Some evidence, a lead to watch.
The release that matters most for loan books: each point on unemployment has meant about 0.09 points on home-loan arrears the same year and business credit about 8% lower within a year.
The first since the 3 November rise to 4.85%, and the last before 9 February. Underlying inflation is above 3% and unemployment is rising: in the 9 such quarters since 1993, a rise came next 3 times, a cut 3 times.
Read the Labour Force for the book. Business lending slows within a year of a rise in unemployment and home-loan arrears rise with it.
Read the CPI for the cash rate. Prices reach loan books through rates, about a year later.
Read the squeezes for your borrowers, not the totals. Food is the one with a national link to insolvencies.
What a lender can do with it
Put jobs first in credit reviews. Track unemployment by state each month. Where it rises faster, as in Tasmania and the Northern Territory this year, expect new lending to slow and arrears to follow within the year.
Plan collections a year after rate moves. This year’s five rises reach variable repayments at once and arrears about a year later: budget hardship and collections capacity for late 2027.
Assess at today’s prices, household by household. National data hides who a squeeze hits. Use current rent, power and food from the applicant’s own statements, not last year’s averages.
Keep hardship apart from default. When costs bite, requests for help come before arrears. Hardship is not default sets out what the law asks.
Do not lean on inflation alone in models. It forecast 2022–26 credit worse than leaving it out. Use the cash rate and unemployment.
Limits
Few runs. Rent and power outran prices in seven runs of three quarters since 1987, two since arrears data begins. Treat them as evidence, not proof.
One housing cycle in the direct data. APRA’s housing arrears start in 2019; before that we use banks’ loans 90 days behind and well secured, mostly home loans.
Breaks. Insolvency figures change with the 2019 debt agreement reform and the 2020–21 COVID relief; the tests leave those years out.
Many tests. We tested 57 links; a few will pass by chance. We grade by one rule and say which tests disagree.
