Reserve Bank hikes official interest rate by 50 basis points to 0.85% to curb inflation

The federal treasurer, Jim Chalmers, says interest rates rising is ‘difficult news for homeowners already facing skyrocketing costs of living’. Photograph: Sam Mooy/AAP

The Reserve Bank has announced the biggest single rise in the cash rate in 22 years as Australia’s central bank tries to quash inflation before it gets out of control.

The RBA board at its regular monthly meeting lifted its cash rate target 50 basis points to 0.85%. Economists were again surprised by the size of the move, having been mostly split between predicting a 25 or 40 point increase, according to Bloomberg.