Australia central bank raises rates to highest since 2024 as inflation stays elevated

Michele Bullock, governor of the Reserve Bank of Australia (RBA), attends a news conference at the bank's head office in Sydney, Australia, on Tuesday, Dec. 9, 2025. Australia's central bank kept its key interest rate unchanged for a third straight meeting in a widely expected decision, while reiterating that future moves will hinge on incoming economic data. Photographer: Brendon Thorne/Bloomberg via Bloomberg | Bloomberg | Australia's central bank on Tuesday raised its policy rate to 4.35%, its highest level since December 2024, amid elevated inflation. The move by the Reserve Bank of Australia was in line with expectations in a Reuters poll of economists and marked the third consecutive rate increase. Eight members of the RBA's board voted for the rate hike, while one member voted to hold rates at 4.1%. In its release, the RBA said that inflation had picked up materially in the second half of 2025, and that the conflict in the Middle East had led to sharply higher fuel and related commodity prices, further adding to inflation. "As expected, developments in the Middle East are having an impact on inflation. Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly," it added. The central bank said that inflation is likely to remain above its 2% to 3% target for some time and that the risks remain elevated. …