{"id":48557,"date":"2026-11-03T03:52:23","date_gmt":"2026-11-03T03:52:23","guid":{"rendered":"https:\/\/financialrush.com\/?p=48557"},"modified":"2026-11-03T03:52:23","modified_gmt":"2026-11-03T03:52:23","slug":"australia-hikes-rates-to-18-year-high-to-fight-inflation","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=48557","title":{"rendered":"Australia hikes rates to 18-year high to fight inflation"},"content":{"rendered":"

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Australia’s central bank raised its benchmark cash rate by 25 basis points to 4.85% on Tuesday, the highest level since November 2008.<\/p>\n

The Reserve Bank of Australia’s move was in line with expectations from economists polled by Reuters, and marked its fifth rate increase this year.<\/p>\n

In its statement,<\/a> the RBA said that the move was a split decision, with six members voting for the increase and three opting for a hold. <\/p>\n

This also comes as the country continues to grapple with high inflation, with the consumer price index rising 4.3% in September, up from 4% in August and marking its highest level since March.<\/p>\n

The central bank also said inflation is now expected to “remain elevated through much of 2027,” and not expected to fall back into its 2%-3% target range till late 2027, three quarters later than previously forecast. <\/p>\n

This was due to higher fuel and other commodity prices, in addition to factors including AI-related investment, which is driving rapid growth in prices for technology-related goods, the RBA said.<\/p>\n

In its September decision, RBA governor Michelle Bullock said that<\/a> inflation is “too high,” driven by higher oil prices from the Iran War and stronger domestic spending. <\/p>\n

“We’re seeing signs that upside risks to inflation are materializing,” she added, saying that additional hikes will come “if that’s what’s needed to get inflation down.”<\/p>\n

Growth has slowed in the first two quarters of 2026. Australia’s GDP rose 2.1% in the June quarter compared to a year earlier, down from 2.5% in the March quarter.<\/p>\n

The RBA is trying to bring inflation back under control while higher borrowing costs and cost-of-living pressures weigh on households and activity. <\/p>\n

When asked if she sees a recession for Australia, Bullock said that it is “not our base case at the moment.” <\/p>\n<\/div>\n\n
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