Interest rates live updates: Fifth dose of pain set to crush millions of Aussies, lone voice tips RBA reprieve

This is a question that comes up a fair bit: why are mortgage holders punished when surging inflation is driven by high global oil prices, terrible domestic productivity, public demand, and spending by Australians without a mortgage?

As Michele Bullock has been at pains to point out, the RBA has a clear mandate – get inflation between 2-3 per cent – and one blunt tool to achieve it: interest rates.

The fact that mortgage holders get hit so hard by rising rates is a uniquely Australian issue.

In the US, mortgages tend to have 30-year fixed rates. France is similar, while other European markets like the Netherlands offer 10-year fixed terms, and the UK between two and five years.

Australia, on the other hand, is dominated by variable rates, and fixed terms are often only one or two years.

That means an interest rate hike negatively impacts far more Australian households than is the case overseas – although equally it means rate cuts offer a unique benefit to mortgage holders.

But restricting the spending of these homebuyers isn’t the only way higher rates work to limit inflation – central banks all over the world use them to tackle rising costs even with different mortgage norms.

As Bullock has explained in several of her press conferences this year, a rate hike works through different channels, including by encouraging savings over spending, limiting borrowing in other parts of the economy, and reducing asset prices.

There’s also another crucial channel: increasing the value of the Australian dollar.

“According to our research, in fact, the most important channel is the exchange rate channel,” she said after the September rate hike.

“And raising interest rates impacts import prices. It makes imports cheaper, encourages people to spend more on imports rather than domestically produced goods. So it alters the supply-demand equation …

“I understand why the people who are impacted by this very directly in terms of loans feel that they are carrying the burden, but actually, the interest rate increase gets into all sorts of cracks.”

Financial comparison site Finder has done its own survey of economists about today’s decision.

It’s not as emphatic as the Reuters poll, but still clear: of 40 economists surveyed, 30 – or a tidy 75 per cent – expect a hike.

That’s broadly in line with market expectations – there’s a roughly 80 per cent chance of a hike priced in, compared to just 22 per cent on October 20.

Bendigo Bank chief economist David Robertson is in the minority tipping a hold.

“The latest inflation data will make this a very close call, but having already increased rates four times this year, the RBA can pause in November,” he said.

“A split decision is likely, however while markets are clearly pricing in a hike, I would prefer to see a more patient approach given recent jobs and spending data.”

AMP’s Shane Oliver, though, said the central bank’s hands will be tied.

“RBA commentary and guidance has been hawkish, and the higher-than-expected September inflation data, along with ongoing upside risks to inflation, leaves the RBA with little choice but to hike again,” he said.

On its own, marginally above-average inflation data just a month after a hike may not have been enough to spark such certain expectations of another increase.

But comments from senior RBA officials before last week’s inflation drop had signalled the central bank was entirely prepared to hike rates for a fifth time this year.

For example, this was assistant governor Sarah Hunter when asked on 60 Minutes whether enough had been done to tame inflation before last week’s data:

“It is hard. Unfortunately, not quite yet. Obviously, the board have put through four rate hikes this year to keep on tackling the challenge. So not quite yet, but … higher interest rates will work.”

Deputy governor Andrew Hauser said this on October 21:

“We are beginning to see some signs that some people in the community are not sure if we’re going to bring inflation back into target at all, or certainly not for an extended period … That is the central banker’s nightmare.”

And Bullock said this on Friday, after the inflation figures:

“I recognise that higher interest rates can be difficult, particularly for households with mortgages who are also facing cost-of-living pressures. But we can’t allow high inflation to persist.

“High inflation hurts everyone. It means higher grocery costs, higher rent, and higher electricity bills. It makes everyone’s pay packets and savings worth less – and it particularly hurts people with lower incomes and little savings.”

Combined with the higher inflation data, it paints the picture of a central bank that is sick and tired of inflation being too high, and is ready and willing to hike rates again.

There are a few reasons almost everyone is expecting a rate hike today.

First and foremost: inflation.

It’s just too high, and has been for far too long.

Last week’s headline CPI figure was only marginally higher than expected (4.3 per cent instead of 4.2 per cent) and the crucial trimmed mean was in line with forecasts at 3.6 per cent.

But both are well beyond the RBA’s 2-3 per cent target range.

Indeed, only twice in the last four and a half years has core inflation sat inside the target band, and then only just at 2.8 and 2.9 per cent.

The headline figure, meanwhile, has been 3 per cent or higher since June 2021, aside from a nine-month reprieve between September 2024 and June 2025.

Then there’s what the RBA has been saying – more on that in our next post.

We’ll get into all the doom and gloom of today soon enough, but for now, let’s stick to the glimmers of hope.

While economists and traders widely expect a hike today, the RBA isn’t the only bank that has entered a meeting with an increase heavily expected recently.

Last week, the Reserve Bank of New Zealand held its own monetary policy roundtable but, rather than handing down higher interest rates as expected, it opted for a hold.

It wasn’t all good news – the RBNZ said it still expects to have to hike later in the year, and even warned about the risk of an abrupt global downturn.

But it does show that market expectations aren’t the be all and end all. Sometimes, surprises do happen.

If you’ve followed along with our interest rates coverage before, you’ll know these days have a regular schedule.

The RBA will release its decision at 2.30pm (AEDT).

This month, it will also publish its quarterly Statement on Monetary Policy – effectively its snapshot of how the economy is tracking along, including some important forecasts about inflation, productivity, unemployment, GDP growth and so on – at the same time.

Governor Michele Bullock will hold her regular post-meeting press conference at 3.30pm.

The one difference today is when we can expect to hear from the treasurer.

Jim Chalmers usually stands up for a press conference on rates at about 3pm. Of course, today there’s a rather popular horse race that starts at that time, so we’re expecting Chalmers to speak around 10 minutes later than usual.

Speaking of the races, you can follow our Melbourne Cup live blog right here.

Good morning and welcome to nine.com.au’s live coverage of the Reserve Bank of Australia’s (RBA) November interest rates decision.

The expected outcome of today’s meeting is hardly a secret; it’s been hard to miss the headlines full of economists, analysts and banks’ predictions that Governor Michele Bullock and her board will hike interest rates for the fifth time this year.

If those forecasts prove accurate, it would take the official cash rate target up to 4.85 per cent.

It hasn’t been that high since late 2008.

Join us as we bring you all the build-up to the decision at 2.30pm (AEDT), followed by reaction from around the country.