🇦🇺The Reserve Bank of Australia raised its cash-rate target 25 basis points to 4.85%.

The Reserve Bank of Australia (RBA) raised its cash-rate target from 4.60% to 4.85%, matching the forecast quoted by FinancialJuice. A separate daily summary reported a six-to-three vote, with three members favoring no change, and described the resulting rate as the highest since 2008.

The RBA said AI-related spending was contributing to sharply higher technology-goods prices, while increased fuel costs were appearing in other goods and services prices. It also raised near-term growth forecasts because of data-center investment, lowered the longer-term outlook, and said growth among key trading partners had exceeded expectations as AI investment offset some effects of the Middle East conflict.

The published forecast messages put consumer price index inflation at 4.5% in Q4 2026, 3.7% in Q2 2027, 2.7% in Q4 2027, and 2.4% in Q4 2028; trimmed-mean inflation was projected at 3.6%, 3.5%, 2.9%, and 2.6%, respectively. For those same periods, reported GDP-growth forecasts were 1.6%, 1.6%, 1.3%, and 1.5%, and unemployment forecasts were 4.7%, 4.8%, 4.9%, and 5.1%.

Governor Bullock said members favoring a hold wanted more data and perceived greater downside risks. She declined to provide forward guidance and said another increase was not definite; the forecast figures therefore should not be presented as commitments to future policy decisions.