What happened
The Reserve Bank of Australia raised the official cash rate target by 25 basis points to 4.60 per cent on 29 September 2026. The Board cited persistent domestic capacity pressures, upside inflation risks from the Middle East conflict, and rising global prices for technology inputs. Output growth has slowed, while inflation remains clearly above the RBA's target range.
Why it matters here
This fourth rate increase of 2026 pushes Australian interest rates to their highest level since late 2011, directly lifting variable mortgage repayments and corporate borrowing costs. Tighter financial conditions will constrain consumer spending and business margins, elevating economic slowdown risks across the Australian economy.
What to watch
Monitor upcoming monthly CPI releases and economic activity indicators ahead of the next RBA Monetary Policy Board meeting.
Source
rba.gov.au