Several central banks have started lifting interest rates again in 2026, as higher fuel and energy prices push inflation up. New Zealand, Australia and the US have all raised rates since July. For tradies, this matters because many homeowners borrow to pay for renovations, and higher repayments leave less money for building work.
New Zealand: two rises in a row
The Reserve Bank of New Zealand held the Official Cash Rate at 2.25% in May 2026. It then raised it to 2.50% in July and to 2.75% on 2 September. Inflation was 4.1% in the June quarter, above the 1 to 3% target.
Banks passed the September rise straight on to floating rates. The research group NZIER says about 64% of New Zealand mortgages will reprice within a year. That means many households will move onto higher rates over the coming months. The next decision is on 28 October 2026.
Australia: highest cash rate since 2011
The Reserve Bank of Australia lifted the cash rate to 4.60% at the end of September 2026. CommBank says this was the fourth rise of the year, and it is the highest level since November 2011. The RBA pointed to higher energy prices, pressure on the economy and rising inflation expectations.
The value of approved alterations and additions to homes was $1.28 billion in August 2026, down 2.1% on July, according to the Australian Bureau of Statistics.
United Kingdom: on hold, but close
The Bank of England held Bank Rate at 3.75% on 17 September 2026. The vote was 6 to 3, with three members wanting a rise. Inflation was 3.1% in August, and the Bank expects it to reach about 3.75% by the end of the year.
The September construction purchasing managers survey said house building was the weakest part of the industry. Rising borrowing costs weighed on it, and clients were putting off decisions on bigger projects.
United States: rates up, remodelling slowing
The US Federal Reserve raised its target range to 3.75% to 4% on 16 September 2026, saying inflation remains elevated.
Harvard’s Joint Center for Housing Studies tracks home improvement spending. In May 2026 it forecast that yearly growth in spending on improvements and repairs would slow from 1.8% in the June quarter of 2026 to 0.5% by early 2027. That would take spending to about $523 billion a year. It said permits for remodelling and retail sales of building products had been flat.
Canada: steady for now
The Bank of Canada held its policy rate at 2.25% on 2 September 2026, where it has been for almost a year. But it said risks of higher inflation have grown. The Canadian Real Estate Association noted that higher bond yields have already pushed up fixed mortgage rates. The next decision is on 28 October 2026.
How rates flow through to trade work
Interest rates do not hit every job the same way. Here is the general pattern to watch:
- Big renovations, extensions and new builds are often paid for with a loan or by topping up a mortgage. These jobs are the most likely to be delayed when rates rise.
- Urgent repairs, leaks and safety work still need doing whatever rates are. This work tends to hold up better.
- When people refix their mortgage at a higher rate, they often look again at spending. Watch for clients asking to split jobs into stages.
- Higher rates also raise the cost of your own vehicle loans, equipment finance and overdraft.
What it means for your business
- Expect some clients to pause or shrink bigger renovation jobs. Offer staged options so work can still go ahead.
- Put more effort into repair, maintenance and compliance work, which is less tied to borrowing.
- Check your own loans and finance costs. If you are on a floating rate, work out what another rise would cost you.
- Keep in touch with past clients. When rates settle, delayed projects often come back.
- Watch the next decisions. Both New Zealand and Canada announce on 28 October 2026.
Sources
- RBNZ OCR September 2026, OrbitRemit
- Most NZ mortgages due to reprice within a year as rates rise, NZ Adviser
- Reserve Bank of Australia raises official cash rate to 4.60% in fourth increase of 2026, CommBank
- Total dwelling approvals fall 6.1% in August, Australian Bureau of Statistics
- UK construction industry declines at slowest rate for eight months, ITV News
- Federal Reserve issues FOMC statement, 16 September 2026, US Federal Reserve
- Remodeling growth to slow sharply in early 2027, Harvard Joint Center for Housing Studies
- Bank of Canada holds rate at 2.25% as inflation risks rise, Canadian Real Estate Association
This article is general information based on sources available in October 2026. Rules, prices and figures change, so check the current details with the official source where you work.