The RBA's latest move

The Reserve Bank of Australia lifted the official cash rate (OCR) by 25 basis points to 4.85% after meeting Monday and Tuesday on monetary policy. Announcing the decision on “Melbourne Cup Day,” the RBA said the move was its fifth rate increase for 2026 and the highest level in 18 years, driven mainly by persistently elevated inflation. Updated forecasts now expect inflation to remain above target through much of 2027, not returning to the 2%–3% range until late 2027, roughly three quarters later than previously projected. The vote was majority, 6–3, with banks already expecting further tightening. Inflation readings in August and September stayed above target.