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Australia's Central Bank Raises Rates Amid Inflation Surge

2/6/2026

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Summary

Story summary

The Reserve Bank of Australia raised the cash rate by 0.25 percentage points to 3.85%, its first raise in two years.
Inflation reached 3.8%, prompting the central bank’s move.
Commonwealth Bank and Westpac announced higher mortgage rates and delayed savings-rate changes.
ME Bank said it would fully pass on the rate rise to variable-rate home loans.
The outlook remains uncertain, with potential for further hikes if inflation persists.

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Story summary

The Reserve Bank of Australia raised the cash rate by 0.25 percentage points to 3.85%, its first raise in two years.
Inflation reached 3.8%, prompting the central bank’s move.
Commonwealth Bank and Westpac announced higher mortgage rates and delayed savings-rate changes.
ME Bank said it would fully pass on the rate rise to variable-rate home loans.
The outlook remains uncertain, with potential for further hikes if inflation persists.