The Reserve Bank of Australia (RBA) has lifted the cash rate by 25 basis points to 3.85%, adding to pressure on households and businesses. While the move was widely expected by markets and most economists, the Reserve Bank says inflation risks remain too high to be comfortable.
The RBA said inflation “picked up materially” in the second half of 2025. Governor Michele Bullock told a press conference:
Based on the data we have seen and the conditions here and around the world, the board now thinks it will take longer for inflation to return to target and this is not an acceptable outcome.
