Australia central bank raises rates to highest since 2024 as inflation stays elevated

Inflation picked up materially in the second half of 2025, while conflict in the Middle East drove sharply higher fuel and commodity prices. The combination points to renewed cost pressures across the economy and a more cautious macro backdrop. This is potentially market-wide, given the implications for inflation expectations, consumer costs, and risk assets.

Analysis

Inflation picked up materially in the second half of 2025, while conflict in the Middle East drove sharply higher fuel and commodity prices. The combination points to renewed cost pressures across the economy and a more cautious macro backdrop. This is potentially market-wide, given the implications for inflation expectations, consumer costs, and risk assets.