Australia raises rates to highest level since 2008 financial crisis - Financial Times

Australia's central bank has lifted its policy rate to the highest level since 2008, extending one of the most sustained tightening cycles among major developed economies. The decision reflects the Reserve Bank of Australia's continued focus on bringing inflation back toward target, even as the pace of price growth has moderated from earlier peaks.

For markets, the move matters on several fronts. Higher rates raise borrowing costs for households and businesses, with particular sensitivity in Australia given the large share of variable-rate mortgages—meaning policy changes transmit to household budgets relatively quickly. A higher cash rate also tends to support the currency by widening rate differentials, though that effect can be offset by shifts in global risk appetite. For equity investors, rate-sensitive sectors such as real estate and consumer discretionary typically face sharper scrutiny, while banks may see margin effects that cut both ways.

What to watch next: the central bank's language on future moves, upcoming inflation and employment data, and how tightly household spending holds up under higher repayments. The key question for markets is whether this level proves to be the peak of the cycle or merely another step—guidance, rather than the decision itself, is likely to drive the next round of repricing.