RBA raises the cash rate to 4.85% (November 2026)

The Reserve Bank raised the cash rate by 0.25 percentage points to 4.85% this afternoon, the highest it has been since 2008. It is the fifth increase this year. Three of the nine board members voted to leave it at 4.60%.

The statement puts the case in its first paragraph. Inflation "remains elevated and recent data indicate that it is broadly based", and the staff forecasts were revised "materially higher". Part is oil and commodity prices caught up in the Middle East conflict. Part is domestic capacity, judged "a little tighter than earlier thought", and the AI investment boom lifting technology goods prices. The statement sees inflation staying above 3 per cent for the coming year. It does not reach the top of the 2 to 3 per cent target range until late 2027, around three quarters later than its previous forecast.

The case for stopping is in the same document. September's statement left room for "increasing the cash rate target further if needed". Today's drops that line and says only that the Board "will continue to do what it considers necessary". Governor Michele Bullock was asked what it meant for the next move. "I don't know what the next move will be," she said. Five increases are now in the system, she added, and the last couple have not yet flowed through.

Markets expected the rise. The ASX rate tracker had an 80 per cent chance at Monday's close, and the ABC's live blog had it at 89.2 per cent by lunchtime. The dollar fell 0.3 per cent to 69.76 US cents. UBS's George Tharenou called the statement "clearly dovish" and expects a hold from here. Capital Economics' Marcel Thieliant expects the next move to be a cut, late next year. BetaShares' David Bassanese sees at least one more rise, with two in the first half of 2027 not ruled out, and ANZ says December or February is still live.

Our own numbers show how the last rise travelled. The September increase reached all 30 lenders we have a reading for from before that decision, from AMP on 3 October to Bank Australia, Bank of Sydney and Qudos on 16 October. Macquarie is first this time, with 0.25 points from 19 November, and the only lender on Savings.com.au's list with an announcement by 5pm. Our series picks up the new cash rate tomorrow morning; the variable rates take days to weeks.

For now, the best variable rate on the board is Greater Bank's Great Rate Home Loan at 6.10% comparison (6.09% advertised), ahead of Up at 6.20%. On a hypothetical $600,000 loan over 30 years, principal and interest, a full 0.25 point pass-through from 6.09% adds about $97 a month: $3,729 against $3,632.

The three members who wanted a hold put more weight on the downside risks Bullock listed: a housing downturn, a rising unemployment rate and no sign of accelerating wages. Their argument, she said, was that four rises were already in place and more data would test them. The Board's own worry runs the other way. Some measures of inflation expectations are assessed to have "risen lately", and the statement sees an increasing risk they become embedded.

The next decision is 8 December. The minutes of this meeting land on 17 November.