RBA Slams Brakes on Economy with Highest Cash Rate Since 2011
The Reserve Bank of Australia (RBA) has increased its cash rate target by 25 basis points to 4.60%, marking a new high since 2011.
This move was in line with expectations and came as part of the RBA's September 2026 meeting, where policymakers noted rising global energy prices due to oil supply disruptions following the Middle East conflict.
The stronger-than-expected recent inflation and domestic capacity pressures are also contributing to price pressures, while AI-related demand is driving increases in global technology goods prices.
Firms are reporting rising costs, with plans to pass them on. Output growth slowed but was slightly stronger than expected in Q2, while consumer spending is easing, housing prices have fallen in most capital cities, and new housing loans have declined.