The Reserve Bank has raised the cash rate by 0.25 percentage points to 4.60%, its highest level in 15 years. It's the fourth rate rise this year, as the RBA works to bring inflation under control. Price pressures are coming from several directions at once: rising housing and electricity costs, weaker productivity, government spending, and higher global energy prices linked to the widening conflict in the Middle East.

Speaking after the decision, RBA Governor Michele Bullock said domestic capacity pressures are the main source of high inflation, meaning demand in the Australian economy is still running ahead of what it can supply. Underlying inflation has been sitting around 3.5% for the past six months, about a percentage point above the RBA's target. The Governor warned that inflationary pressures are likely to last longer than expected, and that the Board will raise rates again if needed. However, she also said further hikes may not be required if the increases so far are enough to bring inflation down.



Diesel prices have been on a rollercoaster in 2026. Before the Middle East conflict escalated in late February, diesel was sitting around 177 cents a litre in our major cities. By the end of March it had soared to over 320 cents. The Government halved the fuel excise from 1 April, but the relief was largely swallowed by rising international diesel prices. Prices eased through May and June, only to climb again as the excise was partly restored in July and fully reinstated at 53.7 cents a litre from 3 August. By late September, diesel had reached around 287 cents a litre, more than $1.10 higher than before the conflict. For businesses, that means higher freight, delivery and operating costs.

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