Australia raises cash rate by 0.25 percentage points to 4.85% in 6-3 vote

The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points to 4.85% on Tuesday, its fifth hike this year, in a 6-3 board vote that marked a shift from the previous hold at 4.60%. The central bank justified the move by citing broadening price pressures and a recent uptick in some inflation expectations, saying further tightening of financial conditions was needed to prevent expectations from becoming entrenched. The decision followed data from the Australian Bureau of Statistics showing September CPI accelerated to 4.3% year-on-year from 4.0% in August, while the trimmed-mean measure rose to 3.6% from a revised 3.5%. The split vote underscores divisions within the board over how much further policy needs to tighten, and markets will now scrutinize upcoming inflation prints and RBA communications for signals on whether more hikes are ahead.