Australia hikes rates to 18-year high to fight inflation
The Reserve Bank of Australia's decision was in line with expectations from economists polled by Reuters, and marked its fifth rate increase this year.
TL;DR
- Australia's central bank raised its benchmark cash rate by 25 basis points to 4.85%.
- This is the highest level since November 2008 and marks the fifth rate increase this year.
- Inflation is now projected to remain elevated through much of 2027, not expected to reach the 2%-3% target until late 2027.
- Factors contributing to inflation include higher fuel and commodity prices, and AI-related investment driving up technology goods prices.
- The decision was split, with six members voting for the increase and three for a hold.
- GDP growth has slowed in the first two quarters of 2026.
- A recession is not considered the base case by the RBA.