Economic Buzz: Australia's central bank raises interest rates amid energy shock and rising inflation pressures

Australia?s central bank has raised interest rates again as rising global energy costs threaten to push inflation close to 5%.

The Reserve Bank of Australia (RBA) increased its cash rate from 3.85% to 4.1%, returning it to the level seen in February 2025. This move reverses the relief borrowers briefly experienced after two rate cuts last year.

The decision was closely contested, with five members of the monetary policy board supporting the hike and four voting to keep rates unchanged. It is the narrowest split since the RBA began publishing voting details.

With this latest increase, households already dealing with higher living costs ? including rising fuel prices and a recent rate hike in February ? are likely to face additional pressure from increased mortgage repayments.

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