Australia Raises Benchmark Interest Rates to 15-Year High Amid Persistent Inflation
On December 9, 2025, Australia's Reserve Bank of Australia (RBA) raised its benchmark interest rate by 25 basis points to 4.6%, marking the highest level in 15 years and aligning with economists' expectations. This marks the fourth rate hike this year totaling 100 basis points as inflation remains stubbornly above target levels. Australia's inflation has exceeded the RBA’s 2%-3% target since early 2026, peaking at 4.6%. Recent data showed a July reading of 3.5%, higher than expected, with more figures due in August. The central bank cited domestic price pressures and energy costs linked to regional conflicts as key inflation drivers. Bank of America noted that core inflation is rising rather than easing, suggesting entrenched price increases. While the RBA has warned about slower economic growth—2.1% for Q2 compared to 2.5% in Q1—the central bank remains focused on curbing inflation.
Topics: economic growth inflation interest rates Reserve Bank of Australia