{"id":446230,"date":"2026-02-03T08:52:07","date_gmt":"2026-02-03T08:52:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/446230\/"},"modified":"2026-02-03T08:52:07","modified_gmt":"2026-02-03T08:52:07","slug":"australias-central-bank-raises-interest-rate-to-3-85-after-3-cuts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/446230\/","title":{"rendered":"Australia’s central bank raises interest rate to 3.85% after 3 cuts"},"content":{"rendered":"

MELBOURNE, Australia — MELBOURNE, Australia (AP) \u2014 Australia\u2019s central bank<\/a> lifted its benchmark interest rate Tuesday by a quarter percentage point to 3.85%, after three rate cuts last year and as inflation surges.<\/p>\n

The Reserve Bank of Australia has boosted its cash rate for the first time since November 2023<\/a>, when the rate rose from 4.10% to 4.35%.<\/p>\n

The rate hike was widely expected after government data last week showed that inflation had run away to 3.8% for the 12 months through December. The annual rate had been 3.4% through November.<\/p>\n

The bank adjusts interest rates to steer inflation toward a target band of between 2% and 3%.<\/p>\n

\u201cThe board considers that inflation is likely to remain above target for some time,\u201d the bank said in a statement.<\/p>\n

Inflation had fallen substantially since it peaked at 7.8% in the last three months of 2022, but had \u201cpicked up materially in the second half of 2025,\u201d the statement said.<\/p>\n

\u201cUncertainty in the global economy remains significant but so far there has been little or no depressing effect on the Australian economy; indeed, recent growth and trade in Australia\u2019s major trading partners has surprised on the upside,\u201d the bank said.<\/p>\n

Treasurer Jim Chalmers described the rate hike as \u201cdifficult news\u201d for millions of Australians with mortgages and businesses.<\/p>\n

Chalmers rejected criticism that government spending was fueling inflation. He noted the bank statement blamed growth in private demand driven by household spending and investment.<\/p>\n

The bank had reduced the cash rate by 25 basis points last year in February<\/a>, May<\/a> and August.<\/p>\n

The adjustment in February last year had been Australia\u2019s first rate cut since October 2020.<\/p>\n

Last year, annual inflation fell from 2.4% in the March quarter to 2.1% in June, before rebounding to 3.2% in September. <\/p>\n

EY Oceania Chief Economist Cherelle Murphy said it was unusual for the bank to boost the cash rate only six months after cutting it.<\/p>\n

\u201cThere is certainly a possibility here obviously, that last rate cut wasn\u2019t needed. But to be fair to the Reserve Bank, that was not obvious at all at the time,\u201d Murphy told Australian Broadcasting Corp.<\/p>\n

\u201cIn fact, it looked like the inflation numbers had been coming down quite nicely. Obviously that\u2019s not turned out to be the case,\u201d Murphy added.<\/p>\n

Murphy said she had been surprised by Australia\u2019s unemployment rate falling from 4.3% in November to 4.1% in December.<\/p>\n

\u201cIt does seem like the economy is running a little bit too hot,\u201d Murphy said. \u201dI certainly wouldn\u2019t rule out another rate hike later in the year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"MELBOURNE, Australia — MELBOURNE, Australia (AP) \u2014 Australia\u2019s central bank lifted its benchmark interest rate Tuesday by a…\n","protected":false},"author":2,"featured_media":446231,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[209753,966,28,109,101,1904,793,2402,965],"class_list":{"0":"post-446230","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-209753","9":"tag-article","10":"tag-business","11":"tag-economic-policy","12":"tag-economy","13":"tag-financial-services","14":"tag-general-news","15":"tag-inflation","16":"tag-world-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/446230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=446230"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/446230\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/446231"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=446230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=446230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=446230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}