RBA lifts rates to highest level in 11 years as inflation rises to 4%
The Reserve Bank raised the cash rate to its highest since 2011, with the RBA Governor citing domestic spending pressures, not just overseas conflict.
The RBA's fourth rate rise this year marks the harshest squeeze on mortgages since 2011. Governor Michele Bullock said inflation has been driven primarily by domestic capacity pressures, a statement that directly contradicts Treasurer Jim Chalmers' recent attempt to blame the Iran war for rising prices.
Inflation climbed to 4 per cent this week, up from 3.5 per cent. Bullock's public statement puts the government under pressure: domestic spending has been stronger than expected, productivity growth remains weak, and the labour market is still tight.
The government faces a difficult final quarter, weighing calls for spending cuts against pressure to deliver cost-of-living relief.
- Fourth
- Rate rise number this year
- 2011
- Highest cash rate since
- 4 per cent
- Inflation rate
- 3.5 per cent
- Previous inflation rate
Why it mattersMillions of Australians with mortgages now face the highest interest rates in over a decade, squeezing household budgets as the cost-of-living crisis deepens.
AustraliaHigher rates increase mortgage repayments across Australia at a time when wages are failing to keep pace with living costs, putting pressure on household finances and the government's economic narrative.
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