The RBA’s Monetary Policy Committee decided to raise interest rates by 25 basis points for the second consecutive month, bringing them to 4.85% at its meeting on Tuesday morning, November 3rd. This was in line with expectations and represents the highest interest rate since November 2008. Six members voted in favor of the increase, while three members preferred to keep the rate unchanged.

The bank’s statement indicated that inflation remains high, with recent data suggesting it is broadly elevated. Inflation forecasts were also revised upwards, with projections indicating that inflation will remain high for most of 2027 and will not return to the target range of 2-3% until late 2027. The bank attributed the high inflation to rising fuel and other commodity prices. The Board recognizes the period in which inflation has been very high and, given the revised inflation expectations and the continuing risks of further increases, the Board believes that further tightening is necessary to support a return of inflation to the target level. The Board will continue to take whatever measures it deems necessary to bring inflation back to the target level. The Board will pay close attention to the changing data and assessments of expectations and will focus on its mission of achieving price stability and full employment.