RBA Slams Brakes on Economy with Fourth Rate Hike in a Year

The Reserve Bank of Australia (RBA) has raised its cash rate to 4.6%, its highest level since late 2011, in a bid to combat stubborn inflation.

Annual inflation was 3.5% in July, while underlying inflation stood at 3.6%, both above the RBA's target range of 2-3%. The increase is the fourth this year and will add around A$120 to monthly mortgage repayments for an average A$730,000 loan.

RBA Governor Michele Bullock said a recession was not the bank's central expectation 'at this point', but left the door open to further rate rises if needed. The decision highlights the difficult position facing the RBA as it balances inflation and economic growth.