RBA Raises Cash Rate to 15-Year High of 4.60 Percent Amid Inflation Rebound

The Reserve Bank of Australia (RBA) has raised its official cash rate target by 25 basis points to 4.60 percent, a 15-year high, in response to an August inflation rebound and persistent capacity constraints.

The decision, which takes effect on September 30, underscores the central bank's growing anxiety over global energy shocks and domestic price pressures that threaten to derail the return to its target inflation band.

Australia's headline inflation rate climbed to 4.0 percent in the year to August, a material acceleration from the 3.5 percent recorded in July, driven by extreme volatility in the energy sector.

The RBA noted that underlying trimmed mean inflation, which strips out extreme price movements, remained stubbornly entrenched at 3.6 percent, while essential services and domestic infrastructure continue to exert upward pressure on household budgets.