1h agoTue 3 Feb 2026 at 3:31amReserve Bank hikes cash rate 0.25 percentage points in February2m agoTue 3 Feb 2026 at 4:46amOne and done? Bullock won’t rule further hikes in or out

Business reporter David Chau asks Ms Bullock if the RBA is one and done with rate hikes or if it will unwind more of last year’s rate cuts.

“The board has taken a cautious approach. They have made one rate rise this time and we’ll observe now what happens to financial conditions,” the governor says.

“We’re already observing some tightening in financial conditions including through the exchange rate … we’ll wait and see what the response of some of the credit, housing, those sorts of thing.

“I’m not predicting there’ll be more rate rises but I’m also not saying that if inflation does remain too high, that there mightn’t be.”

Ms Bullock says she’s essentially not ruling anything in or out.

6m agoTue 3 Feb 2026 at 4:42am

Not driven by market expectations: Bullock

Financial markets see an increasing chance of another rate hike in May.

“What I normally say is that I don’t dismiss market expectations, but I’m also not driven by them.

“The board will monitor and make its own decisions about what’s appropriate and the market is taking a view on that, which is fine, but I won’t basically be driven by the market,” the governor said.

12m agoTue 3 Feb 2026 at 4:37amI’m not going to comment on fiscal policy: Bullock

The governor is asked about the Shadow Treasurer’s assertions that government spending is partly to blame for rising inflation.

Ms Bullock says the central bank base their forecasts on total demand, which is public and private. And she won’t be drawn on her views on current government policy, saying the RBA takes it “as given”.

“Private demand has turned out to be much stronger than we had been forecasting and that, together with what we think is a bit of a weakness in supply… whereas we thought we might have been at balance, we don’t think that we are now.

“We think there’s excess demand. I’m not going to comment on fiscal policy because it’s an independent policy … governments have to supply services … they have to build infrastructure, they have to make those policy decisions.

“We take that as given and together with private demand, look at whether or not it means that inflation is going to be under upward pressure or not. That’s our focus.”

Michele Bullock (ABC News: David Taylor)

15m agoTue 3 Feb 2026 at 4:33am

‘Not an acceptable outcome’ for inflation to remain elevated: Bullock

“The outlook for inflation depends not just on the inflation number today, but on the strength in demand and whether the economy has capacity to meet that demand, and on global conditions as well,” Ms Bullock says.

“Based on the data we have seen and the conditions here and around world, the board now thinks it will take longer for inflation to return to target and this is not an acceptable outcome.”

18m agoTue 3 Feb 2026 at 4:30amRBA governor Michele Bullock speaking

The governor says the board concluded the cash rate was no longer at the right level to get inflation back to target.

20m agoTue 3 Feb 2026 at 4:29am

RBA governor Bullock to speak shortly

Stick with us for live coverage of Michele Bullock’s press conference.

24m agoTue 3 Feb 2026 at 4:25am

Treasurer says private demand driving inflation

The questioning continues in Canberra in the wake of the RBA’s rate hike, with Treasurer Jim Chalmers answering a question from Shadow Treasurer Ted O’Brien.

“Treasurer, as mortgage holders are hit with their 13th interest rate rise under Labor, will you now finally take responsibility?” O’Brien asks.

Chalmers says higher than expected inflation has been driven by the private sector.

“The Reserve Bank board itself has said the pressure is coming from private demand. Like his friend earlier, I encourage him to read the statement the Reserve Bank put out,” Chalmers says.

Here’s what the RBA statement says on demand:

“Growth in private demand has strengthened substantially more than expected, driven by both household spending and investment. Activity and prices in the housing market are also continuing to pick up.”

The federal politics blog has more:

33m agoTue 3 Feb 2026 at 4:16am’Hawkish hike’ says Capital Economics, tipping May rate rise

Some analysis coming through now from economists, most of whom will be patting themselves on the back for correctly forecasting a rate hike.

Abhijit Surya, senior economist at Capital Economics, described it as a hawkish hike by the central bank.

Mr Surya said there was a growing risk rates would need to go above the 4.1% peak, or one more 0.25 percentage point hike he has penciled in.

“Today’s statement was clearly on the hawkish side. The board acknowledged that underlying inflation had picked up materially in the second half of 2025 and that ‘some of the increase in inflation reflects greater capacity pressures’.

“Overall, it’s clear that the RBA believes the road to disinflation will be a long and winding one. Our base case is that the bank will only deliver one more 25bp hike, most likely in May.

“However, given that the bank doesn’t expect underlying inflation to return to the mid-point of its 2-3% target even by early 2028, it’s entirely possible that it will feel compelled to raise rates even higher.”

34m agoTue 3 Feb 2026 at 4:15am

How will this rate hike impact you? Tell us

Whether you’re a saver looking for higher deposit rates or a person with a mortgage, today’s cash rate decision will certainly impact you.

We’d love to hear your story and possibly interview you for ABC News! Email our journalist at terzon.emilia@abc.net.au

38m agoTue 3 Feb 2026 at 4:11amRate hike takes cash rate back to 3.85%

The RBA’s rate hike takes the cash rate back to 3.85%, where it last sat in August 2025.

Here’s how it has tracked over the last decade:

You can read more from Gareth Hutchens, who will be updating this story throughout the afternoon:

51m agoTue 3 Feb 2026 at 3:58am

Have you had any comms from your bank or lender yet?

It’s less than half an hour since the (widely expected) rate hike and I’m yet to see any moves by banks hitting my inbox.

But if you’ve had any comms from your bank about your home loan or savings rate, let us know in the comments.

54m agoTue 3 Feb 2026 at 3:55am

Rate hike dominating Question Time

Treasurer Jim Chalmers has just finished speaking in Question Time in federal parliament.

In a statement after the rate hike, he said it would be “difficult news” for millions of Australian borrowers.

“We know many Australians are doing it tough which is why we continue to roll out responsible cost-of-living relief, including a further tax cut later this year and another one next year.

“At the same time we’re doing what we can to strengthen the budget and address our longstanding productivity challenge.” 

You can follow the political reaction at the politics blog:

58m agoTue 3 Feb 2026 at 3:51amAussie dollar back above 70 US cents

The local currency is now 1% higher against the greenback, at 70.17 US cents.

AUDUSD (LSEG Refinitiv)1h agoTue 3 Feb 2026 at 3:44amRBA statement leaves door open to further rate hikes

Jumping to the final paragraphs of the RBA board’s post-meeting statement and it has left the door open to more hikes if needed to get inflation down, saying it will do what it sees as necessary.

“A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025.

“While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight.

“The Board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.

“The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions.

“In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.

“The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.”

1h agoTue 3 Feb 2026 at 3:41amRBA board decision was unanimous

No split among RBA monetary policy board members on what to do today:

“Today’s policy decision was unanimous.”

1h agoTue 3 Feb 2026 at 3:37am

How does the rate hike affect mortgage repayments?

The increase in the cash rate means that if you’re on a variable-rate home loan, your minimum mortgage repayments will increase, if and when your bank passes along the rate hike.

Use the repayments calculator with your home loan details to find out how much extra you could be paying each month.

1h agoTue 3 Feb 2026 at 3:35amInflation picked up materially: RBA

Taking you through the statement from the RBA board post-rate hike, and unsurprisingly, it’s inflation that gets the top billing as usual:

“While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.

“The Board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures.

“As a result, the Board considers that inflation is likely to remain above target for some time.”

1h agoTue 3 Feb 2026 at 3:34amASX gives up some of its gains but remains positive

The ASX 200 is now up 0.8%, after earlier being more than 1% higher leading up to the RBA’s rate hike.

1h agoTue 3 Feb 2026 at 3:33amAussie dollar shoots up on hike

The Australian dollar is rallying as is to be expected with a rate hike.

It’s now up 0.6% to around 69.9 US cents.