RBA not ruling out further rate rises
The RBA has not ruled out further rate rises, saying higher interest rates are necessary to bring inflation back to target.
Speaking in Sydney, the governor, Michele Bullock, said:
double quotation markHigher interest rates are needed to ensure inflation returns to target.
We raised interest rates three times earlier in the year. A lot of that effect is still to flow through. This is one more.
What we are predicting here is that this will be restrictive enough. Those interest rate increases bring things down.
Bullock said the board would raise interest rates again “if that’s what’s needed to get inflation down”, while acknowledging the impact on households and businesses.
double quotation markNow, I know this decision is difficult for households with a mortgage and businesses with loans, but high inflation hurts all Australians, especially the most vulnerable.
Every household has seen how the price of everything has gone up in recent years. Pay packets don’t go as far as they used to and that’s why we need to stop this high inflation.
The governor said that, alongside inflation, the “global AI investment boom” had also played a role in driving up costs.
double quotation markThese costs are now beginning to flow through to the prices faced by businesses and consumers. The AI boom is also adding to demand in the Australian economy at a time when we already have capacity pressures.
Updated at 02.01 EDT
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Tom McIlroy
Max Chandler-Mather calls for direct election of new Greens leader
The former Greens MP Max Chandler-Mather has called for the party’s membership to get a vote on its next parliamentary leader.
Defeated at last year’s election, the former Griffith MP is now the head of the party thinktank The Green Institute.
In an open letter, he called a members’ vote “a radical idea”. A plebiscite in 2020 saw 62% of Greens members support “one-member, one-vote” for the election of the leader, but the move fell short of a required two-thirds majority.
Chandler-Mather said:
double quotation markPeople often ask how to recreate the political success and energy of UK Greens leader, Zack Polanksi or New York Mayor, Zohran Mamdani.
The recipe for their success doesn’t just lie in their policies, rhetoric or even organising strategy. It lies in the process by which they won their elections. In both instances they were elected by direct member elections.
If we want to win real change, then the Greens should aspire to become a genuine mass membership party with well over 500,000 members, where its support and organisation reaches into the working class communities long abandoned by the Labor party.
Photograph: Mick Tsikas/AAP
double quotation markDirect member election of the leader won’t achieve [our aims] on its own. But I fundamentally believe it is a crucial step towards building the movement we need.
Updated at 02.37 EDT
Tess Ikonomou
More ‘boots on the ground’ for missing hiker in Peru
Loved ones of an Australian hiker missing in Peru have vowed the traveller will return home safely, as they ramp up a private rescue mission.
Jordan Yap, 30, last made contact with friends and family the day before a planned 10-day solo trek along the challenging Cordillera Huayhuash mountain range, starting on September 14.
The Melbourne man’s best friend, Kevin Nguyen, said:
double quotation markJordan, in my opinion, is coming home.
(Jordan) is someone that is incredibly adventurous and takes life by its hands.
More than $74,000 has been donated to an online fundraiser for a private search team of specialised high-altitude mountain guides, alongside rescue efforts by local authorities.
In an update posted online, Yap’s family said they need “more boots on the ground to cover as much territory as possible”.
Photograph: AAP/Kevin NguyenShare
Updated at 02.38 EDT
Luca Ittimani
Markets lift bets on higher interest rates after RBA warning
Markets are expecting interest rates will stay higher for longer after the Reserve Bank board lifted rates and said it was willing to move again.
Money markets were already expecting today’s hike would be followed by another in February and potentially one more later in 2027, with no cuts in the near future.
Those predictions appear to have been bolstered by the RBA’s harsh verdict on Australia’s inflation problem. The Australian dollar is up from 70.11 US cents before the decision to 70.17 US cents.
Bond yields have nudged upwards, and the sharemarket benchmark, the S&P/ASX200, slipped from 8,697 to 8,671 points.
Investment management companies were split on what comes next, with Vanguard predicting rates would stay on hold but VanEck tipping another hike as “highly likely”.
ShareTom McIlroy
Australia a ‘global outlier’ on rate rises: Liberal MP
Liberal frontbencher Simon Kennedy has criticised the federal government over the Reserve Bank’s rate rise decision today, calling on the treasurer, Jim Chalmers, to redo the federal budget. Kennedy said:
double quotation markPaul Keating gave us the recession Australia had to have. Jim Chalmers has given us the household recession Australia did not need to have.
We have had four interest rate rises this year.
Jim Chalmers needs to immediately redo his budget, cut government spending, and explain to the 3 million Australian households with mortgages what this will do to inflation and interest rates.
Kennedy says Australia is a “global outlier” with the most interest rate rises this year of any advanced economy.
Simon Kennedy, the member for Cook, earlier this month. Photograph: Lukas Coch/AAPShare
Updated at 02.00 EDT
RBA not ruling out further rate rises
The RBA has not ruled out further rate rises, saying higher interest rates are necessary to bring inflation back to target.
Speaking in Sydney, the governor, Michele Bullock, said:
double quotation markHigher interest rates are needed to ensure inflation returns to target.
We raised interest rates three times earlier in the year. A lot of that effect is still to flow through. This is one more.
What we are predicting here is that this will be restrictive enough. Those interest rate increases bring things down.
Bullock said the board would raise interest rates again “if that’s what’s needed to get inflation down”, while acknowledging the impact on households and businesses.
double quotation markNow, I know this decision is difficult for households with a mortgage and businesses with loans, but high inflation hurts all Australians, especially the most vulnerable.
Every household has seen how the price of everything has gone up in recent years. Pay packets don’t go as far as they used to and that’s why we need to stop this high inflation.
The governor said that, alongside inflation, the “global AI investment boom” had also played a role in driving up costs.
double quotation markThese costs are now beginning to flow through to the prices faced by businesses and consumers. The AI boom is also adding to demand in the Australian economy at a time when we already have capacity pressures.
Updated at 02.01 EDT
Wondering what the RBA’s rate rise means for you and your mortgage?
Use the Guardian’s mortgage calculator to find out how changes to interest rates could affect your repayments.
Share‘A dark day’: Angus Taylor anticipates RBA rate rise will add to ‘tough time’ for mortgage holders
The opposition leader, Angus Taylor, acknowledged the rate rise will compound the “tough time” facing millions of Australians. Speaking in Melbourne, he said:
double quotation markJust talking to small business people and hearing about the tough time that we’re seeing right across Australia right now.
This is a dark day, a tough day for hardworking Australian families with a mortgage, those in small businesses, but more particularly households who have got a mortgage who are going to pay more as a result of this $1,400 a year in additional costs.
Angus Taylor last week. Photograph: Con Chronis/AAP
Taylor accused the government of exacerbating the pressure on Australians by increasing inflation with excessive government spending.
double quotation markWe know that this is a government that is spending too much. We also know it’s an economy that is not working and that drives up inflation and it drives up interest rates.
Labor’s spending has been much faster than the overall economy. Households and families are having to tighten their belts, but the government hasn’t tightened its belt and that drives up inflation and interest rates, and all Australians are paying a price for that.
Updated at 01.50 EDT
Macquarie Bank passes on interest rate increase after RBA decision
Macquarie Bank has announced changes to interest rates across its variable-rate home loans and everyday bank accounts from next month.
The announcement came less than an hour after the Reserve Bank decided to increase the official cash rate.
In a statement, the bank said:
double quotation markMacquarie will increase variable home loan reference rates by 0.25% p.a., effective from 15 October 2026. Macquarie will also increase the ongoing variable interest rates paid on its transaction and savings accounts from 15 October 2026.
Photograph: Dan Himbrechts/AAPShare
Updated at 01.19 EDT
Chalmers says RBA decision ‘make things tougher for a lot of people’
The treasurer, Jim Chalmers, says Australians are “under pressure” and has pointed to the conflict in the Middle East as a major driver of rising inflation. Speaking in Queensland, he said:
double quotation markThe Reserve Bank statement makes it really clear that we have an inflation challenge in our economy, which is made worse by the war in the Middle East.
The statement makes it abundantly clear that one of the main drivers of inflation in our economy is a conflict on the other side of the world, pushing up global oil prices and being felt right around our economy and indeed right around the world.
The war in the Middle East is not the only factor when it comes to our inflation challenge, but it is a very, very big factor.
Chalmers said Australians were paying a “hefty price” for the conflict.
double quotation markI do understand that a lot of Australians are doing it tough and this decision today from the Reserve Bank will make things tougher for a lot of people.
Australians are paying a very hefty price for that war in the Middle East. And today that price became a bit steeper with this decision from the independent Reserve Bank.
So, we do take responsibility for our part of the fight against inflation. That’s why we will continue to manage the budget in a responsible way, roll out cost-of-living help in a responsible way and deal with these longer-term challenges as well.
Updated at 01.14 EDT
Achol Arok
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I’ll be here to guide you through what looks set to be a busy afternoon. Stay tuned.
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Nick Visser
That’s all for me. Achol Arok will take things from here. Take care!
ShareTom McIlroy
Hanson-Young on Greens leadership: ‘I will fight with everything I’ve got’
Sarah Hanson-Young has confirmed she is running for the Greens leadership.
Here’s more of her statement:
double quotation markPeople deserve better than the failed policies and weak excuses from the Labor and Liberal parties and the hate peddling from Pauline Hanson’s One Nation.
Our communities and environment are being hammered by a rigged system and they want politicians that will fight for them.
I will fight with everything I’ve got.
Updated at 01.51 EDT
RBA board unanimously voted to hike and is ready to lift rates againLuca Ittimani
The RBA’s rate-setting board, in its statement accompanying its decision today, has warned its fears about inflation were coming to fruition and it is ready to lift interest rates again.
The nine-member unanimously voted to lift rates to 4.6%, showing stronger resolve than ANZ and Westpac had forecast (each predicted a split vote).
It singled out a broadening Middle East conflict and strong AI-related demand for pushing up prices globally. Locally, inflation was higher than the RBA expected and businesses were either lifting their prices or looking to do so.
The board said higher fuel prices were partially being passed on to prices of other goods and services and it was possible the ongoing US war on Iran could push inflation still higher and drag global economic activity even lower.
The RBA has already lifted interest rates three times this year. The board said those hikes appeared to be slowing the economy but another was needed to bring too-high inflation back down “in a reasonable period”.
It warned it was not necessarily done moving rates:
double quotation markThe Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed.
Updated at 01.16 EDT
Reserve Bank hikes cash rate to 4.6%, the highest level since 2011Luca Ittimani
The Reserve Bank has lifted its key interest rate to 4.6%, its highest level since 2011, from 4.35%.
The widely expected fourth increase to the cash rate this year will add to repayment costs for millions of mortgage holders across the country.
Data to be released on Wednesday is expected to show underlying inflation rising at an annual pace of 3.6% for the third month running in August, well ahead of the RBA’s target range of 2% to 3%.
The RBA governor, Michele Bullock, has warned workers and businesses could lift their prices and wage demands as they start to expect persistent high inflation.
Before the decision, markets were predicting a further hike by February and more than a 50% chance of another by mid-2027.
Bullock will speak at 3.30pm AEST in Sydney to explain the decision.
ShareHanson-Young to seek Greens leadershipTom McIlroy
Greens senator Sarah Hanson-Young has confirmed she will stand for the party’s leadership.
In a statement posted to social media in the past few minutes she said she was “shocked and saddened” by outgoing leader Larissa Waters’ decision to quit.
double quotation markI know this was an incredibly difficult decision for her and my thoughts are with her and her family.
Larissa has given so much to our movement and to the parliament and we wish her a full and speedy recovery. We look forward to welcoming her back as a fulltime senator when she is ready.
I am speaking with my colleagues about the best way to help the Greens and have asked for their support to be the next leader.
Sarah Hanson-Young. Photograph: James Ross/AAPShare