Australia Raises Rates to an 18-Year Peak as Inflation Pressures Mount

WHO:

SMH.com.au - Shadow treasurer Tim Wilson said federal government spending was responsible for rising inflation and the rate increase.

Cointelegraph - The Reserve Bank of Australia (RBA) raised its benchmark interest rate.

CNBC - The RBA raised its benchmark cash rate; six members voted for an increase and three voted to hold.

CNBC - RBA Governor Michele Bullock said inflation was “too high” and that further rate increases would come “if that's what's needed to get inflation down.”

WHAT:

SMH.com.au - Wilson said the RBA had increased rates “about five” times, while “most advanced countries have had one.”

SMH.com.au - Wilson said Australians would face more pressure as the effects of consecutive rate increases had not yet been widely felt. He described households weighing whether they could afford school excursions and birthday parties.

Cointelegraph - The RBA lifted its benchmark rate to 4.85%, an 18-year high, amid rising technology costs linked to AI investment and higher energy prices.

CNBC - The RBA increased its benchmark cash rate by 25 basis points to 4.85%, its highest level since November 2008 and its fifth increase that year.

CNBC - Australia’s consumer price index rose to 4.3% in September from 4% in August, its highest level since March.

CNBC - The RBA said inflation was expected to “remain elevated through much of 2027” and return to its 2%-3% target range only in late 2027, three quarters later than previously forecast.

CNBC - Australian GDP grew 2.1% in the June quarter compared with a year earlier, down from 2.5% in the March quarter.

CNBC - Bullock said a recession was “not our base case at the moment.”

WHERE:

SMH.com.au - Wilson made his comments to the ABC’s *Afternoon Briefing*.

CNBC - Bullock spoke at the RBA’s head office in Sydney, Australia.

WHY:

The Australian - RBA Governor Michele Bullock said the rate rise was intended “to address domestic capacity pressures.”

SMH.com.au - Wilson attributed inflationary pressure to federal government spending.

CNBC - The RBA cited higher fuel and other commodity prices and AI-related investment driving rapid price growth for technology goods. Bullock also cited higher oil prices linked to the Iran War and stronger domestic spending.

HOW:

CNBC - The RBA’s rate decision was split: six members supported the increase and three supported holding rates.

(UPDATED November 3, 2026 10:01 UTC)

Australia’s central bank raised interest rates to 4.85%, the highest level since 2008. The Reserve Bank cited stubborn inflation, higher fuel costs and strong domestic spending. Governor Michele Bullock warned inflation remains too high, though recession is not expected.

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(UPDATED November 3, 2026 07:04 UTC)

Australia’s central bank raised interest rates to 4.85% as inflation climbed. Governor Michele Bullock warned price pressures may persist through 2027. Rising fuel, technology costs and strong domestic spending drove the increase.