RBA lifts cash rate to 4.6%, highest since 2011, fourth hike of 2026
The Reserve Bank of Australia raised the cash rate by 25 basis points to 4.6 per cent. The move brings the rate to its highest level since 2011 and marks the fourth increase this year. Retailers warned the timing comes at the worst possible moment before the key holiday trading period.
The RBA cited elevated inflation and higher global energy prices due to the broadened Middle East conflict as reasons for the rise. Consumers are likely to visit stores less often, trade down, seek promotions, and become more selective about spending, according to Circana’s head of foodservice APAC, Gimantha Jayasingh. Retailers say they cannot pass on all higher costs during peak sales and will absorb them through tighter margins, especially as many rely on Black Friday and Christmas to rebuild cash reserves. The Business Council of Australia argues that lifting productivity growth to its historic average would save Australians $14,000 a year by 2035 and calls for a 25% cut in red‑tape costs.
“Consumers are more likely to adapt, visiting less often, trading down, seeking out promotions or becoming more selective about when and where they spend,” Gimantha Jayasingh, head of foodservice, APAC, Circana said.
“Consumers are shopping carefully, waiting for promotions and looking closely at value,” Glenn Fahey, chief economist, Australian Retail Council said.
This is the fourth interest‑rate increase by the RBA in 2026. The RBA said inflation remains elevated and that upside risks flagged in August are now materialising. It also noted that the Middle East conflict has broadened, pushing global energy prices above August forecasts.
What we know
Cash rate is 4.6 per cent
Highest level since 2011
Fourth hike of 2026
Returning Australian productivity growth to its historic average would leave Australians $14,000 a year better off by 2035
Business Council calls for a 25% cut in red‑tape costs