The Reserve Bank of Australia (RBA) has raised the cash rate by 25 basis points to 4.60% at its September meeting, marking the 4th rate hike of 2026 and the 16th increase since Labor came to government. According to the RBA, the cash rate is now at its highest level since 2011, with the Board signaling that further tightening remains possible if inflation does not return sustainably to target.

For months, Anthony Albanese and Jim Chalmers have sought to blame overseas events for Australia’s inflation problem. Yet the RBA’s own statement paints a very different picture. Rather than focusing solely on global shocks, the Bank highlighted persistent domestic inflation pressures, ongoing capacity constraints, weak productivity growth and elevated inflation expectations as key concerns. Firms continue to report strong cost pressures, while inflation remains well above target.

The uncomfortable reality is that after more than four years in office, Australians are facing the highest interest rates in 15 years, a cost-of-living crisis that continues to bite, and an economy struggling with weak productivity growth. While global factors have undoubtedly played a role, the RBA’s statement makes it increasingly difficult to argue that Australia’s inflation problem is simply being imported from overseas.

The numbers remain uncomfortable:

• Trimmed mean inflation is running at 3.6%
• Inflation expectations remain elevated
• Businesses continue to report strong cost pressures
• The RBA says inflation remains “too high” and is focused on ensuring it does not become embedded in wage and price-setting behaviour.

Importantly, the Board reiterated that it is prepared to increase rates further if required, stating it will continue to do what it considers necessary to bring inflation sustainably back to target.

For borrowers, investors and businesses hoping the hiking cycle was over, today’s decision is a stark reminder that inflation remains the RBA’s number one priority and that Australians may not yet be at the end of this tightening cycle.

The bigger question is this: if inflation is still too high, productivity remains weak, living costs continue to rise and interest rates have now increased 16 times since Labor took office, at what point does the Government accept responsibility for the economic conditions Australians are facing?

Do you think this is the final hike, or is another increase coming before year-end?

Read the full RBA statement here.