Australia's central bank has today raised the key interest rate to a near 12-year high to tame stubbornly high inflation.
The Reserve Bank of Australia lifted the cash rate by a quarter of a percentage point to 4.35%, its highest level since December 2011.
It was the first tightening in five months and also the first under the stewardship of Michele Bullock, who took over as central bank governor in September.
She had been widely expected to act after the latest data showed annual inflation running at a hotter-than-expected 5.4% in the three months to September 30.
"Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago," Bullock said in a statement.
She signalled that the prospect of any further rise is in the balance, a softening of the bank's previous warnings that further tightening "may be necessary" to rein in prices.
"Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks," she said.
The central bank said returning inflation to 2-3% by late 2025 is nevertheless a priority and it "will do what it is necessary" to get there.
The hike was the latest of a string of increases that began in May 2022 as the Covid-19 pandemic and war in Ukraine fanned inflation and led the bank to push up the key interest rate from its previous rock-bottom 0.1%.
An Essential survey released today by The Guardian found 53% of the 1,049 Australian voters it polled felt higher interest rates were having a "very negative" or "somewhat negative" impact on them.
"This is a difficult day for people with a mortgage," Treasurer Jim Chalmers told reporters following the central bank's announcement.
"We do understand that Australians are already under substantial pressure in their household budgets and this will tighten the screws further," he added.
