SYDNEY — The Reserve Bank of Australia delivered a further interest-rate increase Tuesday, warning that inflation pressures have proved to be more persistent than expected over recent months.
The official cash rate was raised to 4.35% from 4.10%, marking the first hike since July.
“Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago,” RBA Gov. Michele Bullock said in a statement.
“While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected,” Bullock said.
The RBA now expects CPI inflation to be around 3.5% by the end of 2024 and at the top of the target range of 2% to 3% by the end of 2025, Bullock added.
The RBA will publish a full set of economic forecasts on Friday.
The hike, which follows news of higher-than-expected inflation in the third quarter, makes the RBA appear as an outlier among the world’s major central banks, many of which have signaled recently that they may have done enough to thwart inflation.
“The board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe,” Bullock added.
The increase is the 13th since the RBA started raising interest rates at speed in May 2022.