Australia's Cash Rate Hits 15-Year High Amid Inflation Fears

The Reserve Bank of Australia has increased its cash rate to 4.6 per cent, marking a 15-year high as it aims to combat underlying inflation exceeding its target range.

This is the fourth interest rate hike in recent months, and economists warn that further rises may weaken an economy already showing signs of slowing down.

The increase is expected to add around $480 per month to repayments on an average $730,000 mortgage compared to January, translating to over $5,000 a year.

Treasurer Jim Chalmers attributes the persistent inflation to soaring oil prices and conflict in the Middle East. However, UNSW economics professor Richard Holden suggests that government spending is also contributing to price pressures.