RBA Raises Interest Rates to 15-Year High Amid Stubborn Inflation

The Reserve Bank of Australia has raised interest rates to a 15-year high, increasing borrowing costs for millions of Australian households. The benchmark rate was lifted by 0.25 percent to 4.6 percent on Tuesday.

This decision is in response to stubborn inflation, with the annual rate standing at 3.5 percent in July, well above the central bank's target range of 2-3 percent.

The RBA cited 'upside risks' including higher energy prices due to the US-Israel conflict and an AI-driven surge in tech costs as contributing factors to inflation.

Australia's Treasurer Jim Chalmers acknowledged that the hike would make things harder for many Australians, with nearly one-third of mortgage holders at risk of 'mortgage stress.'

The government has promised to take responsibility for its part in fighting inflation by managing the budget responsibly and rolling out tax cuts and cost-of-living help.