Highlights

  • The cash rate started 2026 at 3.60% and reached 4.60% after four increases totalling 100 basis points.
  • The Board paused at its August 2026 meeting before resuming with a 25 basis point increase in September.
  • Inflation peaked at 7.9% at the end of 2022 before falling within the 2-3% target range during 2024-25.
  • Inflation rose again in the second half of 2025 and remained above target as the Board approached the November meeting.

Four rate rises in a single calendar year, a pause that lasted one meeting, and a return to tightening that took the cash rate target to its highest point in the cycle: that is the story of the Reserve Bank of Australia's 2026. Understanding the sequence helps borrowers, savers, and investors read where the Board has come from as it approaches the November decision.

The Three Rises Before August

Three increases before the August pause took the cash rate from 3.60% at the start of 2026 to 4.35%. Each was a 25 basis point step, reflecting the Board's practice of moving in measured increments rather than larger adjustments. By mid-2026, the cumulative tightening of the year had already exceeded expectations formed earlier in the year.

The Board paused at its August 2026 meeting, holding the cash rate at 4.35%. The August Statement on Monetary Policy, published at the same time as the hold decision, set out the Board's central forecast and noted that risks to the inflation outlook were skewed to the upside.

The September Move

At its 29 September meeting, the Board raised the cash rate target by 25 basis points to 4.60%, effective that day. The decision was unanimous. The Board cited excess demand greater than previously assessed, energy price rises well above August forecasts, and the risk of inflation becoming embedded as the primary drivers.

The 4.60% cash rate target is where it stands heading into the November 2026 Board meeting. The Board will decide at that meeting, on 3 November, whether to move again or pause.

Where Inflation Has Travelled

The inflation journey provides context for the rate timeline. Inflation peaked at 7.9% at the end of 2022, driven by a combination of global supply chain pressures, energy prices, and strong domestic demand. It fell progressively, reaching the 2-3% target range during 2024 and 2025.

In the second half of 2025, inflation picked up again and has remained above the target range since. Headline CPI was 4.3% in the September 2026 monthly measure. Bullock told senators on 28 October that inflation is likely to remain elevated for some time, citing renewed energy price rises and persistent domestic cost pressures.