PomegraAustralia Cash Rate Rises to 4.85% as Inflation Climbs
Why did the RBA raise interest rates today?
The Reserve Bank of Australia (RBA) raised its cash rate 0.25 points to 4.85% on Tuesday, an 18-year high, in a 6–3 vote as inflation hit 4.3% and the Middle East war lifted oil prices.
Key numbers
| RBA cash rate | 4.85%+0.25 pts from 4.60%, highest since 2008 |
|---|---|
| Board vote | 6–3Three members wanted to hold at 4.60% |
| Annual inflation (Sept) | 4.3%+0.3 pts vs 4.0% in August |
| RBA headline inflation peak forecast | 4.5%December 2026 quarter |
| Unemployment forecast | 5.1%By Dec 2028, from 4.7% in Dec 2026 |
| Australian dollar | ~69.8 US cents-0.3% after the decision |
What happened
The Reserve Bank of Australia (RBA) raised its cash rate 0.25 points to 4.85% on Tuesday, an 18-year high, in a 6–3 vote as inflation hit 4.3% and the Middle East war lifted oil prices. Three of the nine board members wanted to leave the rate at 4.60%. Prices rose 4.3% in the year to September, up from 4.0% a month earlier, as fuel costs jumped. The bank now expects underlying inflation to stay above 3% until late 2027, about three quarters later than it first thought.
Why it matters
The Reserve Bank of Australia's fifth hike this year makes borrowing more expensive for people with variable-rate home loans, while savers can earn more. The bank is trying to slow price rises driven by higher fuel and energy costs from the Middle East conflict. It expects unemployment to climb from 4.7% to 5.1% by late 2028, a sign it expects higher rates to cool the economy.
Who this affects
- MarketmixedMedium impact
- Borrowers lose, savers gain; Australian shares barely moved.
- CompanybearishMedium impact
- Households with variable-rate mortgages face higher monthly repayments.
- CompetitorsneutralLow impact
- Canada also hiked; the US Fed held at 3.75–4.00%.
- IndustrybearishMedium impact
- Higher borrowing costs weigh on housing and slow economic growth.
Australia vs United States, Canada
| Australia (RBA)AUD | 4.85% | Hike +0.25 pts (6–3) | 2026-11-03 |
|---|---|---|---|
| United States (Fed)USD | 3.75–4.00% | Hold (10–2) | 2026-10-28 |
| Canada (BoC)CAD | 2.50% | Hike +0.25 pts | 2026-10-28 |
As of 2026-11-03
How we got here
RBA makes its first rate hike of 2026.
RBA lifts cash rate to 4.60%, its fourth increase this year.
Official data show annual inflation rose to 4.3% in September.
RBA lifts cash rate to 4.85% in a 6–3 vote.
What to watch
- Next RBA board decision; the statement made no promise of further rises and stressed incoming data.December 2026
- RBA assumes oil at US$109.5 a barrel in the December quarter, 35% above its August assumption.Q4 2026
- Next official inflation reading, against the RBA's forecast peak of 4.5% for headline inflation.Q1 2027
Educational content only. Not investment advice.
More briefsAll briefs →
Amazon Stock Rises 2.2% on Analyst Upgrade
Amazon (AMZN) briefly gained 5% as Phillip Securities lifted its price target to $330 on cloud strength
Oil Drops 7.6% to $104.77 on US-Iran Peace Talks
Brent settled at $104.77 as Exxon (XOM) fell 4% and Kosmos Energy (KOS) 13% on hopes Qatar talks end the war
Tempus AI Stock Jumps 12% After Q3 Earnings Beat
Tempus AI (TEM) shares hit $83.26 as sales topped $411.5M and full-year revenue guidance was raised.