Rate rise to 15-year high fuels voter anger as Labor's economic grip weakens
The RBA raised the cash rate to 4.6%, a 15-year high, while most Australians misunderstand how rates fight inflation.
The Reserve Bank governor Michele Bullock lifted the cash rate to 4.6% this week, the highest in 15 years. Headline inflation rose to 4% for the year to August.
Unemployment jumped to near a five-year high. House prices fell for a sixth month running.
Talkback callers around Australia lashed the bank as cruel for the move. A Reserve Bank study released in July found only 25% of Australians could explain that higher rates would eventually lower inflation.
More than half believed higher rates would push costs up, the opposite of what the central bank intends. Labor is trying to defend its economic record before the 2028 election.
- 4.6%
- Cash rate
- 4%
- Headline inflation year to August
- 25%
- Australians who understand
- 3.6%
- Trimmed mean inflation
Why it mattersVoter anger over cost-of-living pressures is reshaping Labor's political standing at the worst time, and widespread confusion about how interest rates work makes the government's job defending its record much harder.
AustraliaEvery Australian with a mortgage or savings account feels the rate rise in their hip pocket, and the 2028 election could hinge on whether voters trust Labor or the Coalition to manage the economy better through the next phase.
✓ Claims checked against the source. checked 2 h ago
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