Overview
- The Reserve Bank’s Monetary Policy Board voted 6–3 to lift the cash rate by 25 basis points to 4.85%, a decision made on Tuesday that was the fifth hike delivered during 2026.
- Governor Michele Bullock omitted the usual line saying the bank was willing to hike again and said the board was preserving options while watching how recent moves feed through to the economy.
- Updated RBA staff forecasts show inflation staying above the 2–3% target band into late 2027 and project slower growth and higher unemployment as policy tightens.
- Higher rates are already raising mortgage repayments, squeezing household budgets, weakening home sales and slowing construction with community groups and lenders reporting rising financial stress.
- Markets read the governor’s signalling as cautious, the Australian dollar fell and traders reduced the odds of more near-term hikes, while some economists warn the tightening could still push the economy into several weak quarters or a technical recession.