RBA Raises Cash Rate Amid Persistent Inflation

The Reserve Bank of Australia (RBA) has today increased the cash rate by 0.25 percentage points to 4.60%.

Headline inflation eased to 3.5% in July 2026, but underlying inflation remains above the RBA’s target range, with trimmed mean inflation at 3.6%. Higher global energy costs and ongoing labour market pressure continue to support price growth, and the RBA will closely monitor inflation, consumer spending and unemployment conditions.

This is the fourth cash rate hike this year ending the pause that had been in place since May. It is currently at its highest level since October 2011.

The RBA increased the cash rate despite a softer labour market report, citing persistent underlying inflation, stronger than expected economic growth and rising energy prices. While unemployment rose to 4.6%, inflation remains above the RBA’s 2-3% target range, with higher fuel costs and ongoing capacity pressures continuing to flow through the economy.

The RBA reiterated its commitment to returning inflation to target and signalled that further rate increases may be required if inflationary pressures persist. Economists remain divided on the outlook, with some expecting another rate rise before year end, while others caution that additional tightening could weigh on economic growth and the housing market. For investors, elevated inflation and borrowing costs continue to support demand for high quality assets with secure income streams and strong rental growth.