RBA Hikes Interest Rates to 15-Year High Amid Inflation Concerns

The Reserve Bank of Australia (RBA) has raised interest rates to a 15-year high, increasing the benchmark cash rate by 0.25 percentage points to 4.6 per cent.

This decision comes as the RBA attempts to combat stubborn inflation and has not ruled out further hikes despite rising unemployment, falling house prices, and sluggish economic growth.

The total value of residential mortgages in Australia has more than doubled since October 2011, when the cash rate was last above 4.5 per cent, reaching $2.51 trillion as of now.

RBA governor Michele Bullock warned that expectations of elevated inflation have become entrenched among business and consumers, and that the jobless rate may need to rise as high as 5 per cent to ease pressure on inflation.