RBA holds official interest rate at 3.6% after surprise inflation jump | Reserve Bank of Australia

The Central Bank left the official interest rate unchanged, a widely expected decision, following a surprise rise in inflation.

The RBA’s monetary policy board kept the cash rate on Tuesday at 3.6%, where it has been since August. Economists and banks overwhelmingly expected no change.

The central bank has cut interest rates three times in 2025, easing pressure on mortgage holders and fueling rapid house price rises.

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Core inflation rose to 3% in September, the highest level of the RBA’s preferred range; This was the first acceleration in the key metric since 2022.

The headline rate rose to 3.2%, including variable categories such as electricity costs, which rose 9% in the quarter as government energy rebates ended.

The surprise rise in inflation dashed hopes that lower interest rates would be implemented to support the labor market. Data at the end of September revealed that unemployment had risen to a surprising 4.5%.

Last week, financial markets reduced their bets on another rate cut within the next 12 months. Big banks don’t expect any further cuts until next year.

RBA governor Michele Bullock is scheduled to address the media on Tuesday afternoon to explain the board’s thinking.