Australia's Reserve Bank has raised interest rates to 4.6 per cent, their highest level since 2011, marking the fourth increase in 2026. The decision, made unanimously, will add hundreds of dollars monthly to mortgage repayments for millions of households, though the RBA has signalled further rate rises may follow if inflation remains elevated. The central bank is prioritising inflation control over employment concerns, with Governor Michele Bullock explicitly acknowledging that higher unemployment may be necessary to bring inflation under control.

The cumulative impact on borrowers is substantial: four rate rises this year have added approximately £364 monthly to repayments on a £600,000 mortgage, rising to £606 monthly on a £1 million loan. However, critics including the Australian Council of Social Service warn that the real cost extends beyond mortgage holders, with evidence suggesting an extra 200,000 Australians have lost paid work since rate increases began. ACOSS chief Cassandra Goldie cautioned that rates approaching or exceeding 5 per cent would constitute a "human disaster," as those losing employment would rely on JobSeeker payments of £417 weekly—well below both the minimum wage and median rent. Economists acknowledge that underlying inflation at 3.6 per cent remains above the RBA's 2-3 per cent target, justifying continued tightening despite economic slowdown.