RBA lifts cash rate to 4.85%, highest since 2008

The Reserve Bank of Australia raised its cash rate by 0.25 percentage points to 4.85% on November 3, taking borrowing costs to their highest level since November 2008 and delivering the fifth increase of 2026. Six of the central bank’s nine board members backed the increase, while three voted to leave the rate at 4.60%. The split decision came as inflation remained above the RBA’s 2% to 3% target band and its outlook worsened. In its statement, the board said revised forecasts and continuing upside risks warranted tighter financial conditions to return inflation to target. It said inflation was expected to remain above 3% over the coming year and that it would do what it considered necessary to bring inflation sustainably back to target. The statement dropped an explicit reference used previously to raising rates further if needed. The board did not signal that cuts were imminent, but the change in wording and three votes against the increase pointed to differing views among policymakers about the next step. The RBA’s decision followed a rise in consumer inflation to 4.3% in September, up from 4.0% in August, according to figures cited in reports on the decision. The bank said...