RBA Hikes Cash Rate to 4.60% Amid Persistent Inflation Pressures

The Reserve Bank of Australia (RBA) has raised its cash rate target by 25 basis points to 4.60%, marking the fourth increase in 2026 and pushing borrowing costs to their highest level in roughly 15 years.

The decision reflects renewed concern that inflation is proving more persistent than expected, driven by higher global energy prices, domestic capacity constraints, stronger-than-expected inflation data, and rising technology-related costs linked to artificial-intelligence demand.

Australia's annual CPI inflation accelerated to 4.0% in August from 3.5% in July, while trimmed mean inflation remained at 3.6%. The RBA warned that further rate increases remain possible if inflation does not ease sufficiently.