The 25 basis point rise to 4.85% was consistent with the RBA's recent warnings, but the 6–3 vote behind it carries information about how contested the outlook has become.

On its own, the move from 4.60% to 4.85% on 3 November 2026 extends a path the RBA had been signposting for weeks. What sets this decision apart is not its size but its margin: six members of the Monetary Policy Board voted to raise, and three voted to hold.

For anyone trying to read where interest rates go next, that split may be the more useful piece of information.

A familiar step, an unfamiliar vote

The September statement had already said the Board would do what was necessary, "including increasing the cash rate target further if needed." In October, senior officials were blunt about the deteriorating Inflation outlook. Deputy Governor Andrew Hauser said on 21 October that "The inflation outlook looks materially worse than we projected in the August report." Governor Michele Bullock told a Senate committee on 28 October: "Inflation will therefore likely be higher than was our base case in August."

Against that background, a further 25 basis point increase was consistent with the RBA's own messaging. The September decision, by contrast, had been unanimous. Five weeks later, a third of the Board preferred to wait. The RBA has not named who voted which way, and it has not published the minority's reasoning.

Why the vote carries information

A unanimous decision tells observers that the Board sees the balance of risks in much the same way. A split tells them that reasonable members, looking at the same data, have come to different conclusions about what to do next.

That matters because the RBA's statement describes a genuinely two-sided picture. On one side: "Inflation remains elevated and recent data indicate that it is broadly based," and "there is an increasing risk that higher inflation expectations will become embedded." On the other: "The economy is slowing, housing prices have fallen significantly and the Unemployment rate has risen."

The November Statement on Monetary Policy reinforces both sides. It says "a number of upside risks have crystallised since the August Statement," but also that "Tighter monetary policy alongside a weaker outlook for the housing market is expected to keep GDP growth below trend." It judges financial conditions to be "restrictive".

When the forces pulling in opposite directions are this strong, a divided vote suggests that small changes in the data could make a difference to the outcome of future meetings. That is an interpretation, not something the RBA has said.

How beliefs about policy are formed

RBA research published in October offers a useful lens. Research Discussion Paper 2026-06, "Perceived Monetary Policy Rules: Evidence From Professional Forecasters in Australia" by Jonathan Hambur and Qazi Haque, found that forecasters' perceived responsiveness of the RBA to inflation rose sharply after the 2022 tightening. Importantly, it found that beliefs shifted after actual policy moves – communication alone was not enough.

That finding suggests decisions, not just words, shape what people expect the RBA to do. A rise delivered even with dissent still counts as a move. At the same time, the split shows observers that the Board's threshold for acting is being debated internally.

Hauser has stressed why expectations matter so much: "We can't allow expectations to shift away from the target." He noted a rising share of firms that see 3–3.5% inflation as the "new normal". He also said: "We do need to keep working on the very basic point that higher interest rates actually bring inflation down."

Uncertainty the RBA acknowledges

A divided Board fits with the uncertainty the RBA describes in its own outlook. The statement refers to heightened uncertainty, including scenarios in which inflation is higher and activity is lower – an uncomfortable combination for any central bank.

Several assumptions underpinning the forecasts could also move. Energy prices are assumed to decline from elevated levels, but the SMP notes they could stay high or rise if shipping and refining disruptions persist. The cash rate assumption, taken from market pricing as at 28 October, averages 4.9% for 2026/27 and 4.8% for 2027. The Exchange Rate is held at its 28 October level, with the trade-weighted index around 65.3 over the forecast years.

Assistant Governor Christopher Kent added another source of doubt on 19 October, when asked about the neutral rate: "Well, I would dispute that we know where it is now." He also observed that "there are indicators where the labour market has become less tight a bit faster than we might have forecast."

The forecasts themselves are projections. Headline inflation is forecast at 4.5% over the year to December 2026, and trimmed mean inflation at 3.6%. Unemployment is projected at 4.7% by December 2026, rising to 5.1% by December 2028. Each of those numbers could turn out differently.

What to watch from here:

  • The next monthly CPI update on 25 November 2026, after September's 4.3% headline reading.
  • The next decision at 2.30 pm on 8 December 2026.
  • The minutes of this meeting, whose release date has not been confirmed.

The bottom line

The quarter-point rise to 4.85% was in keeping with what the RBA had been saying. The 6–3 vote is the newer signal, showing that a meaningful minority of the Board judged the risks differently, against a backdrop of heightened uncertainty that the RBA itself acknowledges. It does not change the Board's stated commitment – "The Board will continue to do what it considers necessary to bring inflation sustainably back to target" – but it suggests future decisions may be closely fought. Readers weighing what this means for them can consider speaking with a licensed adviser or their lender.