RBA Raises Cash Rate to 4.85%, Highest in 18 Years

Australia’s central bank has delivered another blow to borrowers, raising the official cash rate by 25 basis points to 4.85%. It is the fifth rate increase of 2026 and the highest level in 18 years.

The Reserve Bank of Australia (RBA) announced the widely anticipated decision on Tuesday, November 3. Its Monetary Policy Board cited persistent inflationary pressures as the key reason for the increase.

Annual inflation accelerated to 4.3% in September 2026, up from 4.0% in August, reinforcing market expectations of a rate rise. All four major Australian banks—NAB, ANZ, Commonwealth Bank and Westpac—had forecast the move. CBA described it as an “insurance hike” to guard against inflation risks linked to Middle East tensions, the global AI investment boom and tight domestic capacity.

With rates now at their highest since 2008, attention turns to Governor Michele Bullock’s press conference for signals about whether further tightening could follow in December or February. NAB has cautioned that this may not be the last hike of the cycle, keeping mortgage holders on edge heading into the summer months.

Source: ABC News – RBA Interest Rate Live Coverage, November 3, 2026