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RBA raises interest rates as inflation pressures remain high

Published July 29, 2026 at 9:02 PM UTC

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The Reserve Bank of Australia (RBA) has increased the cash rate by 25 basis points to 3.85%, citing persistent inflationary pressures. This decision marks the first rate hike since February 2025 and reflects the RBA's concern that inflation remains above its 2-3% target range. Governor Michele Bullock stated that inflation "picked up materially" in the latter half of 2025, leading the board to conclude that it will take longer for inflation to return to target levels. The RBA now projects that inflation will not reach the desired range until June 2027. The rate increase is expected to impact households and businesses, particularly those with variable-rate loans, as borrowing costs rise. The RBA's decision underscores its commitment to controlling inflation, even at the cost of higher interest rates.