The Reserve Bank of Australia (RBA) has increased its key interest rate to 4.6%, up from 4.35%. This decision marks the fourth rate hike this year and brings the cash rate to its highest level since 2011.
This widely anticipated increase is expected to raise repayment costs for millions of mortgage holders across Australia. The RBA governor, Michele Bullock, has previously cautioned that businesses and workers might increase their prices and wage demands if they anticipate sustained high inflation.
Underlying inflation data, due to be released on Wednesday, is projected to show an annual rise of 3.6% for August, which would be the third consecutive month at this rate and above the RBA's target range of 2% to 3%. Australian Treasurer Jim Chalmers attributed inflation to global oil prices and the re-escalation of conflict in the Middle East, rather than government spending.