The Reserve Bank of Australia increased its main policy rate, the cash rate, by 25 basis points from 4.10 percent to 4.35 percent, in line with the consensus forecast. Officials had left rates on hold at their previous four meetings after delivering aggressive policy tightening over the previous twelve months, but they today concluded that further action is required to ensure inflation falls back to within their target range of two percent to three percent.

In the statement accompanying today's decision, officials judged that"inflation has passed its peak but is still too high and is proving more persistent than expected a few months ago". The most recent monthly CPI data showed an increase in headline inflation from 5.2 percent in August to 5.6 percent in September. Although officials retain their assessment that inflation will fall over the next two years, they now expect that decline will be slightly more gradual. CPI inflation is now expected to be around 3.5 percent at end-2024, up from their previous forecast of 3.3 percent, and to be"at the top of the target range" by the end of 2025, compared with a previous forecast of 2.9 percent. Officials highlighted several uncertainties relating to the inflation outlook.

Officials also acknowledged risks to the growth outlook, with the outlook for consumer spending considered to be particularly uncertain. But they noted that economic growth so far this year has been stronger than they had expected and that conditions in the labour market remain strong.

After previously judging that they required more information to assess the impact of previous rate hikes before tightening further, officials today concluded that they now have enough information to make such a move. Returning inflation to its target range remains officials' top priority and risks to the inflation outlook are clearly their major concern at present. Their statement concluded by noting that they"will do what is necessary" to achieve their objective, and they advised that further tightening may be required.

After keeping rates on hold for four meetings in a row, the Reserve Bank of Australia is expected to raise its policy rate by 25 basis points to 4.35 percent. Consumer prices rose to 5.6 percent in September from 5.2 and 4.9 percent the two prior months.

The Reserve bank of Australia (RBA) announces its monetary policy with regard to interest rates on the first Tuesday of each month with the exception of January when it is on vacation. The RBA is the central bank of Australia and its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by setting the cash rate to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system.

The Reserve Bank of Australia's (RBA's) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board with the objective of achieving low and stable inflation over the medium term. Other responsibilities include maintaining financial system stability, while at the same time promoting the safety and efficiency of the payments system. The RBA regards appropriate monetary policy as a major factor contributing to the Australian dollar's stability, which in turn leads to full employment and the economic prosperity for Australia.

The RBA is unique among the central banks - it has two boards with complementary responsibilities. The Reserve Bank Board is responsible for monetary policy and overall financial system stability. The Payments System Board has specific responsibility for the safety and efficiency of the payments system.

The RBA sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks and other institutions for their own savers and borrowers. It also tends to affect the price of financial assets, such as bonds and shares, and the exchange rate, which affect consumer and business demand in a variety of ways. Lowering or raising interest rates affects spending in the economy.

The level of interest rates affects the economy. Higher interest rates tend to slow economic activity; lower interest rates stimulate economic activity. Either way, interest rates influence the sales environment. In the consumer sector, few homes or cars will be purchased when interest rates rise. Furthermore, interest rate costs are a significant factor for many businesses, particularly for companies with high debt loads or who have to finance high inventory levels. This interest cost has a direct impact on corporate profits. The bottom line is that higher interest rates are bearish for the financial markets, while lower interest rates are bullish.