RBA Slams Brakes with Fourth Rate Hike of the Year

The Reserve Bank of Australia (RBA) has increased interest rates to their highest level in 15 years, raising the cash rate by 25 basis points to 4.60%. This is the fourth rise this year, following increases in February, March, and May.

The decision was unanimous and came as no surprise, with all four major banks forecasting it beforehand. The RBA cited several reasons for the increase, including elevated inflation, widening conflict in the Middle East pushing global energy prices higher, and AI-related demand driving up technology goods prices.

Housing prices have fallen in most capital cities, and new home loans have dropped noticeably. However, this was not enough to prevent another rate rise. The RBA has warned that further increases may be necessary before Christmas, with ANZ forecasting another 25 basis point rise in November.