Australia's Reserve Bank raised its cash rate target by 25 basis points to 4.85% on Tuesday, the highest level since late 2008, in a 6-3 board vote^2,3,4,5.

The move was the fifth increase this year and matched expectations in a Reuters poll of economists, CNBC reported⁴.

The board's majority cited inflation expectations that it said had become entrenched². Three members voted to leave the rate at 4.60%^2,4,5.

The bank now expects inflation to stay above 3% over the coming year and to return to the top of its 2% to 3% target band only in late 2027, later than it previously forecast^2,5.

Governor Michele Bullock said she did not know what the next move would be and that the last two increases had not yet fully flowed through, The Conversation reported⁵.

Bullock said the bank was trying to curb inflation without tipping Australia into a recession "if we can avoid it," while noting households may feel poorer as incomes grow slowly⁵.

The Conversation said a fully passed-on increase would add about A$120 a month on a A$731,000 average new owner-occupier mortgage⁵. Most Australian mortgages are variable-rate loans, so repayments typically move with the cash rate⁵.

The bank also raised its unemployment outlook, expecting the jobless rate to reach 5.1% by the end of 2028 from a five-year high of 4.7%, according to The Conversation⁵. Growth is expected to slow as higher rates and falling housing prices weigh on consumption and housing investment, while business investment, including data centres, is seen as relatively strong⁵.

The Guardian reported the decision as a fifth hike this year and focused on the burden for mortgage holders¹. RNZ noted the New Zealand dollar rose about a quarter of a percent against the Australian dollar after the announcement².

Whether another increase follows is not settled. The 6-3 split and Bullock's comments on lagged effects leave the next meeting open, outlets said^4,5.