Daily newsletter · Wed 4 Nov 2026
The Reserve Bank of Australia raised rates to a level Australians have not seen since 2008
The Reserve Bank of Australia lifted its cash rate by a quarter point to 4.85% on Tuesday afternoon in Sydney. It is the fifth rise this year and the highest the rate has been since November 2008.
Three of the nine board members voted against it. Six wanted the rise and three wanted to hold at 4.60%. The board also dropped the warning it had been carrying that further rises might be needed.
Inflation is the reason given. The bank says price pressures are broad-based, and expects inflation to stay above 3% for the coming year. It does not see inflation back at the top of its 2% to 3% target band until late 2027.
Borrowers pay for this within weeks. The rise takes the average variable rate on an owner-occupier home loan to about 6.74%, and it lands with house prices already falling and unemployment already rising.
Markets latched onto the missing warning. The ASX 200 closed 0.34% higher at 8,886.80, with property trusts leading, and the Australian dollar fell to a two-week low against the US dollar.
the three dissenters matter more than the quarter point. The Aussie fell on the day its central bank raised rates, which says the market heard an ending rather than a continuation. I'd want to see December-quarter inflation before agreeing with it.
More in
All stories →- Wednesday 11 November October's inflation report put a half-point rate rise back on the table
- Saturday 7 November America added 165,000 jobs in October, and the bond market heard a December rate rise
- Friday 30 October The US economy grew 3.4% last quarter, but September's spending went on higher prices
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