The Reserve Bank has hiked interest rates by 25 basis points to 4.35 per cent, inflicting more pain on households amid persistent inflation and resilient consumer spending.
The Reserve Bank has raised interest rates to 4.35 per cent, inflicting more pain on households already struggling with the soaring cost of living.
In a statement the RBA said that while inflation had passed its peak, it was concerned that it was"proving more persistent than expected a few months ago," and took the decision to raise rates in order to be"more assured" it would return to the two to three per cent target by the end of 2025.A key reason for the rise was continued pressure on the price of services, with the bank noting costs were"continuing to rise briskly.
In August outlook, the bank had forecast inflation dropping to 4.1 per cent by the end of the year, an outcome most economists now believe is unlikely. Some commentators had also argued the raise was unnecessary, even suggesting that it risked creating a recession.
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