Reserve Bank hikes rates for first time since June
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The news: The Reserve Bank has lifted the cash rate to 4.35%, meeting expectations after inflation data came in hot last month. RBA governor Michele Bullock noted sticky inflation, particularly services inflation, was proving hard to tame.
The numbers: The RBA's key interest rate is now at its highest level since November 2011, when it was reduced to 4.50% after almost a year at 4.75%. It is the first increase since rates reached 4.10% in June this year. The cash rate has increased 4.25% the RBA began hiking in May 2022. Annual inflation was 5.4% in the year to September.
The context: In late October RBA governor Michele Bullock hinted at future monetary tightening in the case of "a material upward revision to inflation outlook". Appearing before a senate committee on 26 October, Bullock said the board was still considering whether September's hotter than expected CPI figures would warrant a hike in November.
What they said: "The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly," Bullock said in a statement.
"While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected."
The source: Reserve Bank Media Release
