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Reserve Bank lifts cash rate to 4.85 per cent, its fifth rise this year
Reserve Bank raises cash rate to 4.85 per cent in its fifth rise this year, fuelling recession fears.
Key points
- The cash rate rise to 4.85 per cent is the fifth quarter-point increase this year.
- The decision will intensify fears that Australia is heading for recession.
- Heavily mortgaged households will face a deeper squeeze from the monetary tightening.
Why it matters. The tightening will weigh further on house prices, discretionary spending and residential construction, while lifting the incentive to save.
The Reserve Bank lifted the cash rate to 4.85 per cent, a quarter-point increase. It will intensify fears that Australia is heading for recession and deepen the squeeze on heavily mortgaged households. House prices and discretionary spending will weigh further, and the incentive to save will rise. Residential construction, real estate agents, furniture stores and white goods retailers will feel the effect.
Latest updates
Reserve Bank lifts cash rate to 4.85 per cent, its fifth rise this year
The Reserve Bank of Australia raised the official cash rate by a quarter point to 4.85 per cent on Tuesday, its fifth increase this year. The rate is the highest since 2008, according to the central bank's figures. Governor Michele Bullock has said the rise will be felt by households as a squeeze on incomes. The Australian Financial Review reported that the move will deepen pressure on heavily mortgaged households and weigh on house prices and discretionary spending. The decision comes as the central bank seeks to contain inflation that rose sharply after the pandemic.
Reserve Bank of Australia Raises Cash Rate to 4.85 Per Cent in Fifth Hike This Year
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Reserve Bank of Australia Raises Cash Rate to 4.85 Per Cent, Highest Since 2008
The Reserve Bank of Australia has raised the cash rate to 4.85 per cent, a level not seen since 2008. It is the fifth rate hike in 2026. The bank is responding to an inflation crisis that domestic and international factors have fuelled. Yahoo Finance Australia is running live coverage of the decision and the market reaction. Further rises or pauses will depend on upcoming inflation data.