The Reserve Bank of Australia (RBA) has once again lifted the cash rate target, bringing it to the highest level since 2011.

It is the fourth hike of 2026. Today’s rise of 25 basis points takes the cash rate to 4.6 per cent following a unanimous decision by its monetary policy committee

“Inflation remains elevated, and some of the upside risks flagged in August are materialising,” the RBA said in its decision. “The conflict in the Middle East has broadened, and global energy prices are now much higher than had been assumed in the August forecasts.”

Gimantha Jayasingh, the head of foodservice, Apac, for market intelligence company Circana, said the rise could have a further impact on discretionary spending in Australia.

“Another interest rate rise would add to the pressure on household budgets and make discretionary spending decisions more considered,” he added.

“Consumers are more likely to adapt, visiting less often, trading down, seeking out promotions or becoming more selective about when and where they spend.”

The RBA said its focus is on ensuring that “high inflation does not become embedded”. 

Retailers, however, said that the increase has come at the “worst possible time for the industry”.

“Retail spending has remained resilient, but there is a point where it becomes fragile,” said Glenn Fahey, chief economist with the Australian Retail Council. “The combination of another rate rise and sharply higher fuel costs risks taking momentum out of consumer spending just as retailers enter the most important trading period of the year,” Fahey said.

“Consumers are shopping carefully, waiting for promotions and looking closely at value. Retailers can’t pass all of their increased costs on, especially in peak sales periods, so many are absorbing them through tighter margins.

“Many discretionary retailers rely heavily on Black Friday and Christmas to rebuild cash reserves, making the timing of this rate rise seriously difficult.”

Meanwhile, the Business Council of Australia (BCA) blamed the Australian Government, arguing that productivity growth would make the economy more resilient to global pressures.

“Lifting productivity is the only way to sustainably ease cost-of-living pressures, and returning Australian productivity growth to its historic average would leave Australians $14,000 a year better off by 2035,” said BCA CEO Bran Black.

“Put simply, Australia is drowning in red tape, and our living standards are paying the price.

“That’s why the Business Council is calling for a target to cut red tape costs by 25 per cent, to help take the heat out of prices for Australian workers and businesses.”