RBA lifts cash rate to 4.85%, highest in 18 years
The Reserve Bank of Australia raised its cash rate by 0.25 percentage points to 4.85 per cent on Tuesday, its fifth rise this year. The board voted six to three in favour of the increase, and bond markets rallied on bets that it may be the last hike for now. Governor Michele Bullock said inflation is too high and will stay elevated for longer, adding that "some pain now will prevent even worse pain down the track." The bank dropped its explicit warning of further rises if needed, and economists expect a pause in December. Treasurer Jim Chalmers blamed high fuel prices linked to the Middle East conflict, and he faces pressure to find spending cuts in the December budget update. Financial comparison site Canstar estimates the five hikes have added more than $450 a month in repayments on a $600,000 mortgage, while national property prices have fallen 6.7 per cent since February.