RBA interest rates: Reserve Bank hikes official cash rate to 4.35% in blow to mortgage holders
The Reserve Bank of Australia has raised the official cash rate to 4.35%, marking the third consecutive increase aimed at curbing inflation driven by higher fuel prices. The decision comes amid economic uncertainty due to the ongoing US-Israel war on Iran, which is expected to reduce economic growth by half a percentage point in 2026. While unemployment remains low under baseline forecasts, extended conflict could push joblessness above 5%, though a recession is not currently expected.
- ▪The Reserve Bank of Australia raised the cash rate to 4.35% from 4.1%, the third straight hike.
- ▪Inflation is projected to reach 4.8% in the year to the June quarter due to oil supply shocks from the Iran conflict.
- ▪Economic growth is forecast to halve to 1.3% in 2026, down from earlier projections, because of the war's fallout.
- ▪Unemployment is expected to remain at 4.3% by year-end under baseline conditions but could exceed 5% in adverse scenarios.
- ▪The RBA did not model the impact of Australia physically running out of fuel.
- ▪Australians face another year of falling living standards as prices outpace wages.
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RBA interest rates: the Reserve Bank of Australia’s rate decision comes amid growing worries about inflation and the economic fallout from the US-Israel war on Iran. Photograph: Lisa Maree Williams/Getty ImagesView image in fullscreenRBA interest rates: the Reserve Bank of Australia’s rate decision comes amid growing worries about inflation and the economic fallout from the US-Israel war on Iran. Photograph: Lisa Maree Williams/Getty ImagesReserve Bank of AustraliaRBA interest rates: Reserve Bank hikes official cash rate to 4.35% in blow to mortgage holdersReserve Bank of Australia raises rates for third consecutive meeting, lifting them to early-2025 levels Follow our Australia news live blog for latest updates Get our breaking news email, free app or daily news podcast Patrick Commins…
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