Key Takeaways

• Rates hit 4.85%. The fifth increase of 2026 takes the cash rate to its highest level since 2008.

• Inflation remains stubborn. Headline inflation reached 4.3% in September, with underlying inflation at 3.6%, both above the RBA’s 2–3% target.

• Markets expect a December pause. Futures pricing suggests markets expect no further hike in December, although the outlook remains data-dependent.

• Borrowers face more pressure, savers benefit. Higher rates increase mortgage costs but support returns on savings deposits.

Inflation Forces the RBA’s Hand

The RBA has raised the cash rate to 4.85%, following another disappointing inflation report. September figures showed headline inflation climbing to 4.3% and underlying inflation rising to…