Business · 2026-11-03 · Morning briefing

Australia hikes interest rates to an 18-year high

The Reserve Bank of Australia raised its benchmark cash rate by 25 basis points to 4.85% on Tuesday, its highest level since November 2008. The move, which marks the fifth rate increase this year, was not unanimous; the board split its vote six to three in favour of the hike.

The decision is a response to persistent inflation, which reached 4.3% in September. The central bank has consequently pushed back its forecast for returning to its 2-3% target range, now not expecting to reach it until late 2027—three quarters later than previously projected. The RBA cited higher commodity prices and rapid price growth for technology goods, driven by AI-related investment, as key factors.

This tighter policy comes as Australia's economy shows signs of slowing; annual GDP growth fell to 2.1% in the June quarter from 2.5% in March. Despite the pressure on households from higher borrowing costs, RBA governor Michele Bullock stated that a recession is "not our base case at the moment."

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• Australia hikes rates to 18-year high to fight inflation
• Australia RBA Hikes Rates to 4.85%, 18-Year High, Citing AI and Energy-Driven Inflation
• RBA interest rates live updates: Reserve Bank of Australia hikes rate to 4.85% in blow to mortgage holders – latest news
• Australia's central bank hikes rates to 18-year high in a split vote
• RBA raises interest rates to 18-year high in fifth hike this year, piling pressure on borrowers

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