The Reserve Bank of Australia raised its benchmark rate by 25 basis points to 4.85%, citing rising technology costs linked to artificial intelligence investment and higher energy prices. Its monetary policy board voted 6–3 in favour of the increase, with three members preferring to keep rates at 4.60%. The central bank now expects inflation to return to its 2%–3% target range only in late 2027, around three quarters later than previously forecast. Fuel and commodity prices affected by the Middle East conflict are also adding to inflationary pressures. The Australian rate is now at its highest level in 18 years, contrasting with the Federal Reserve’s decision to hold rates steady the previous week.
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