The Reserve Bank of Australia (RBA) today decided to increase the official cash rate by 0.50% to 1.85%.
The increase follows a slightly better than expected annual inflation figure of 6.1 per cent in the June quarter and falling house prices in some eastern state cities.
Balancing out these factors is an unemployment rate of 3.5%, the lowest rate in almost 50 years.
The RBA faces a challenging period as it weighs up trying to rein in inflation against the spiraling cost of living.
Lenders can set interest rates independently of RBA movements, and their responses to this official cash rate hike may vary.
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