RBA lifts rates to highest level in 15 years – risking a sharper slowdown of the economy
The challenge is whether the RBA can bring inflation under control without causing a recession.
The Reserve Bank's Monetary Policy Board raised interest rates by 0.25 percentage points on Friday, lifting the cash rate target to 4.60 per cent. This marks the highest level since late 2011. The decision reflects growing frustration among senior officials with the delayed progress in bringing inflation back down to the RBA's 2-3 per cent target range.
Currently, headline inflation stands at 3.5 per cent annually, while core inflation is at 3.6 per cent. The central bank aims for average inflation around 2.5 per cent over the medium term. Recent geopolitical tensions in the Middle East and rising oil prices have also contributed to inflation pressures.
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