The Reserve Bank of Australia raised its cash rate to 4.85% – the fifth hike this year – as inflation stays above target and mortgage borrowers feel the squeeze.

The Reserve Bank of Australia (RBA) lifted its official cash rate by 25 basis points to 4.85%, the highest level seen since 2008. The move marks the fifth increase in 2026, taking the rate from 4.60% to 4.85% in an effort to curb inflation that has surged to 4.3% year‑to‑September.

Policy split and outlook

The decision was not unanimous: six board members voted for the hike while three preferred to keep the rate unchanged. In its post‑meeting statement the board reiterated its commitment to bring inflation back to the 2‑3% target range, but stopped short of signalling any further moves, suggesting a wait‑and‑see approach.

RBA forecasts show the cost‑of‑living squeeze persisting for another year, with inflation expected to stay above 3% until the end of 2026 and only dip below that threshold by late 2027. Economic growth is projected at 1.6% for 2026 and 1.3% in 2027, well under the economy’s potential rate of about 2%.

Impact on households

The latest hike adds roughly $107 to the monthly payment on a $700,000 mortgage, according to Canstar, pushing the cumulative increase from five hikes this year to about $532. Over 3.3 million Australian households with home loans face higher repayment burdens as the RBA continues to battle imported inflation from a prolonged Middle East oil shock.

What traders are watching

• Whether the RBA board signals a pause or another hike in the next meeting
• Australia’s CPI releases for October and November
• Global oil price trends as the Middle East conflict evolves
• Australian unemployment data due later this month

Related news

• Half of office workers feel remote, NY Fed survey shows
• Silver price falls below $50.50 after US raid on Iran's Qeshm Island
• Pound weakens to near 1.3400 ahead of US midterm elections
• Morning market overview, November 3 2026

More from ITF

• ITF trading signals for gold and forex
• Copy verified traders with ITF Copy Trading
• This week’s economic calendar

This article is compiled from international market news for information only. It is not investment advice.