Queensland businesses are facing another blow after the Reserve Bank lifted the cash rate

By Business Chamber Queensland

1 October 2026

Queensland businesses are facing another blow after the Reserve Bank lifted the cash rate by 25 basis points to 4.6 per cent, taking interest rates to their highest level in 15 years and delivering the fourth-rate rise of 2026.

Passing on this increase will see the average small business paying 7.66%, with small business variable loans up from 6.69% at the start of the year.

Business Chamber Queensland said the decision would add to the pressure on businesses already grappling with rising costs, workforce challenges and mounting regulation.

The most recent Pulse Survey of Business Conditions found confidence in the Queensland economy has slumped by the biggest margin in 20 years, with businesses reporting weaker profitability, softer sales and declining investment.

Business Chamber Queensland General Manager, External Affairs, Catherine Hughes said higher rates would make an already difficult operating environment even harder.

“Queensland’s small businesses are doing it tough. Rising operating, energy and fuel costs, workforce challenges, growing regulatory obligations, squeezed margins and now higher borrowing costs, are all taking a toll.”

Ms Hughes said the rate rise would also intensify the pressure on businesses to reconsider their growth plans.

“Economic uncertainty is already causing businesses to delay spending and investment and this latest increase will make those decisions even harder.

“This rise highlights the need for the government to lift the nation’s productivity and that means making it easier for businesses to invest, improving access to skills and training, delivering meaningful tax and workplace relations reform, backing innovation and research and development, and cutting unnecessary red tape.

“Building business capability so employers can confidently adopt new technologies such as artificial intelligence and train the next generation must also be a priority.

“The most effective long-term response to inflation is to build a stronger, more productive economy.

“Give businesses the right conditions and they will drive growth, create jobs and invest in Queensland’s future.”

ENDS

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