RBA interest rates: Reserve Bank hikes cash rate for fifth time this year in blow to mortgage holders

The Reserve Bank has hiked rates for the fifth time this year, from 4.6% to 4.85%, in an attempt to regain control of surging inflation amid an ongoing global oil shock triggered by the war in the Middle East.

The RBA’s decision to hit mortgage holders again is no surprise after inflation jumped to 4.3% in the year to September and comes following tough talk from senior central bank officials over recent days and weeks.

The cash rate has now reached its highest level since 2008.

Back-to-back hikes will heap more pain on over 3.3m households with home loans and turn the screws on a federal government under pressure for its economic management.

The latest rate rise will lift the monthly interest payment on a $700,000 home loan by $107, according to Canstar, bringing the total rise in repayments over this year’s five hikes to $532.

Prior to the announcement, Jim Chalmers, the treasurer, said “people are under substantial pressure already”, adding that higher borrowing costs would “make things much harder”.

Tuesday’s decision comes amid rising fears of the growing toll from sharply higher interest rates. Two major banks on Monday slashed their growth forecasts for the Australian economy, with CBA analysts warning of a “sharper, longer slowdown”.