At its November 2026 meeting, the Reserve Bank of Australia’s Monetary Policy Board decided to increase the cash rate to 4.85 per cent. This marks the latest step in the series of rate hikes aimed at tempering demand.
The Board noted that inflation is still too high, driven in part by higher fuel prices and a broad set of price and cost pressures. It expects inflation to stay above the 2–3 per cent target range and not return to the middle of that range until around mid‐2028.
The unemployment rate has risen and is projected to continue increasing over the next few years, even though the number of jobs is still expected to grow.
Housing prices have declined, and overall consumer spending has slowed, but price and cost pressures remain elevated across the economy.
The Board expects the Australian economy to decelerate over the coming years. It views this year’s interest‐rate increases as a means to further curb spending, which it deems necessary to bring inflation down.
Board members emphasized their focus on returning inflation to target and expressed awareness of the prolonged period of high inflation.