Overview
- The Reserve Bank’s board unanimously voted to raise the cash rate by 25 basis points to 4.60% on Tuesday, taking the benchmark to its highest level since 2011.
- The RBA said underlying inflation remained sticky and pointed to higher global energy prices and an AI-driven rise in tech costs as material upside risks that could require further tightening.
- Major lenders signalled they will pass the increase to variable mortgage rates within days, which would add about $90 to $107 a month to typical $600,000–$700,000 loans if passed on in full.
- Markets moved to price a meaningful chance of another hike at the November meeting and economists said upcoming ABS inflation and labour-market releases will determine the bank’s next step.
- Household exposure is much larger than in 2011, with residential mortgage balances near $2.51 trillion, which raises the risk that further rate rises will deepen borrower stress and lift unemployment as a trade-off to lower inflation.