Reserve Bank to Lift Cash Rate to 4.85%

The Reserve Bank of Australia's Monetary Policy Board meets Tuesday, with a 0.25 percentage point increase widely expected.

Updated on Nov. 2, 2026 in Inflation

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The Reserve Bank of Australia is expected to raise the cash rate by 0.25 percentage points to 4.85 per cent on Tuesday. It would mark the fifth rate hike in 2026.

Why it matters

The Reserve Bank warned inflation was likely to remain higher than expected, driven by rising energy costs, booming investment in artificial intelligence and persistent economic constraints. Australians with mortgages and other variable-rate debt face higher repayments if the increase proceeds.

The expected cash rate of 4.85 per cent would be the highest in 18 years, following five rate hikes in 2026 and a 0.25 percentage point increase on Tuesday. Whether the Board raises the rate as expected remains to be confirmed at the meeting.

The players

Reserve Bank of Australia

Australia's central bank, responsible for setting the national cash rate and monetary policy.

Anthony Albanese

Australia's Prime Minister, who travelled to Antigua and Barbuda for the Commonwealth Heads of Government Meeting at King Charles's personal request.

Jim Chalmers

Australia's Treasurer, expected to manage the political fallout from the interest rate rise.

Rebecca Judd

Australian media personality who publicly criticised the expected rate hike and the Treasurer on Instagram.

The details

Commonwealth Bank economists revised their forecast after the Reserve Bank's warning about inflation. Australian property prices have fallen for seven consecutive months, while Treasurer Jim Chalmers is expected to manage any political fallout.

- Tuesday: Reserve Bank Monetary Policy Board meets to set the cash rate, with a rate rise to 4.85 per cent expected.
- Next Friday evening: Prime Minister Anthony Albanese is expected to return to Australia from the Commonwealth Heads of Government Meeting.

Macro View

Australia has raised rates five times in 2026, more than any other major Western nation, as the central bank responds to inflation that is running hotter than expected. The move extends a tightening cycle that has coincided with seven consecutive months of falling property prices.

Households with variable-rate mortgages could see higher monthly repayments if the cash rate rises to 4.85 per cent. Borrowers should review their budgets ahead of the Reserve Bank's decision.

The takeaway

Borrowers with variable-rate loans should check how a 0.25 percentage point increase would change their repayments before the decision is announced. Setting aside a small buffer can help absorb further rises if inflation stays elevated.

What happens next

The Reserve Bank's Monetary Policy Board will announce its decision on the cash rate on Tuesday, and Prime Minister Anthony Albanese is expected back in Australia next Friday evening.