RBA Hikes Cash Rate to 4.85% in Fifth Increase This Year, Highest Since 2008

The Reserve Bank of Australia has lifted the official cash rate by 25 basis points to 4.85%, the fifth increase this year and the highest level since 2008. The decision comes as inflation accelerated to 4.3% in the year to September, driven in part by a global oil shock linked to the war in the Middle East. Mortgage holders will feel the impact immediately, with lenders expected to pass on the higher rate. RBA officials had signaled the move in recent weeks, stressing the need to bring inflation back to target. The central bank remains focused on cooling price pressures, but the path ahead is uncertain as global energy costs continue to pose risks. For Australian households, the cumulative effect of rate rises is squeezing budgets, and more pain may be on the horizon.