Why the Australian dream is costing more | The Business

By ABC News (Australia)

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The Reserve Bank has lifted interest rates to highest level in 15 years. The RBA governor Michele Bullock said there is too much demand in the economy, especially from the AI boom, and firms are passing on higher prices because of the Iran war. The central bank has increased rates by 0.25 percentage points, which lifts the cash rate target to 4.6 per cent, up from 4.35 per cent. It will be a blow to homeowners with large mortgages. It is also the highest cash rate millions of households have faced since taking on a home loan after 2011. Since then, mortgage debt has risen 138 per cent to $2.51trillion in July 2026. The decision by RBA board was unanimous, and the central bank isn't ruling out more pain ahead. The next quarterly inflation read, due out late October, will be crucial to whether interest rates rise again on Melbourne Cup Day. #ABCBusiness Subscribe: http://ab.co/1svxLVE Note: In most cases, our captions are auto-generated. #ABCNEWS #ABCNEWSAustralia

Tags: Australia, abc, abc news, news, business news, finance news, economic news, economy, finance, the business, abc news australia, mortgage, rba, reserve bank, home loan, Michele Bullock, inflation, cpi, variable rate, interest rates