EL7.AI
Central BanksMedium•4 November 2026•
2 min read

Reserve Bank of Australia Raises Rates in Split 6–3 Vote as Inflation Persists

Key Facts

16 members voted to raise rates, while 3 opposed the decision at the November 2026 meeting.
2The bank expects headline and core inflation to remain above 3% through the end of 2027, returning to the midpoint of the 2–3% range in mid-2028.
3The producer price index for final demand, excluding exports, rose 1.1% quarter on quarter and 3.6% year on year through the September 2026 quarter.
4The S&P/ASX 200 closed up 0.3% on November 3, 2026.
5The Australian dollar fell 0.3% to US$0.6977 after the November 3, 2026 decision.

The Reserve Bank of Australia raised interest rates at its November meeting, with 6 members of the monetary policy board supporting the decision and 3 opposing it, according to Reuters via MarketScreener. Market data showed the S&P/ASX 200 closed up 0.3% on November 3, contradicting descriptions of the session as a decline in Australian shares. The Australian dollar, meanwhile, fell 0.3% to US$0.6977 after the decision, according to Reuters. Governor Michelle Bullock said the next move in rates was unclear and that the bank would remain alert to upside inflation risks. The split vote highlights differences among board members over the policy path, while the bank sees price pressures persisting in the years ahead.

The bank expects headline and core inflation to remain above 3% through the end of 2027, before returning to the midpoint of its 2–3% target range in mid-2028. It raised its forecast for headline inflation in the fourth quarter to 4.5%, while expecting the unemployment rate to exceed 5% by the end of 2028. The bank attributed the higher inflation outlook to a stronger energy price path amid the ongoing conflict in the Middle East, along with increased pressure on domestic capacity. It said the conflict had pushed energy prices higher, and that rising global energy prices and resilient demand had added to inflationary pressures. By contrast, it expects tighter monetary policy and a weaker housing market outlook to keep GDP growth below trend.

Australian Bureau of Statistics data show the producer price index for final demand, excluding exports, rose 1.1% in the September quarter and 3.6% in the 12 months to that quarter. The bureau said the quarterly increase was driven mainly by growth in construction and services, with residential property demand remaining strong amid supply constraints. Annual consumer price inflation rose to 4.3% in September from 4.0% in August. Bullock said holding rates at the next meeting could allow the bank to assess the impact of tightening, following 5 increases during the year, while upside inflation risks remain. The bureau set 29/01/2027 as the release date for the next producer price index, covering the December 2026 quarter.