The Reserve Bank has left the official interest rate on hold after a surprise jump in inflation, in a widely expected decision.
The RBA’s monetary policy board on Tuesday kept the cash rate at 3.6%, where it has sat since August. Economists and banks overwhelmingly expected no change.
The central bank has cut interest rates three times in 2025, easing pressure on mortgage holders and fuelling rapid house price rises.
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Core inflation rose to 3% – the top of the RBA’s preferred range – in September, the first acceleration of the underlying measure since 2022.
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The headline rate rose to 3.2%, including volatile categories such as electricity costs, which rose 9% in the quarter as government energy rebates ended.
The surprise bump in inflation dashed hopes that lower interest rates would be delivered to support the jobs market. Data in late September revealed a surprise increase in unemployment to 4.5%.
Financial markets over the last week have cut back their bets on another interest rate cut being handed down in the next 12 months. Major banks do not expect another cut until next year.
The RBA governor, Michele Bullock, was scheduled to address media on Tuesday afternoon to explain the board’s thinking.