RBA interest rates decision: Reserve Bank increases cash rate to 3.85% in blow to mortgage holders

The Guardian - World NewsCenter-LeftEN 2 min read 100% complete by Jonathan Barrett and Patrick ComminsFebruary 3, 2026 at 04:49 AM

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The Reserve Bank of Australia (RBA) increased the cash rate to 3.85% on Tuesday, reversing the previous rate-cutting cycle. This decision, made at the end of a two-day meeting, is expected to impact mortgage holders, increasing monthly repayments on a $600,000 home loan by $90. The RBA cited unexpectedly high inflation in the second half of 2025, driven by strong private demand and tight labor market conditions, as the reason for the hike. The central bank now forecasts inflation to reach 4.2% by mid-year, remaining above target for longer than previously anticipated. Rising prices for new homes and durable goods are also contributing to inflationary pressures.

Key Entities & Roles

Key Player Opposition Context

Canstar 40% Australia ×380% Reserve Bank of Australia ×795%

Keywords

interest rates 100% cash rate 90% rba 80% mortgage holders 70% inflation 70% monetary policy 60% cost-of-living crisis 50% economic recovery 50% consumer prices 40% home loan 40%

Sentiment Analysis

Very Negative

Score: -0.60

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The Guardian - World News

Political Lean

Center-Left (-0.40)

Far LeftCenterFar Right

Classification Confidence

90%

Geographic Perspective

Australia

This article was automatically classified using rule-based analysis. The political bias score ranges from -1 (far left) to +1 (far right).

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interest rates cash rate rba mortgage holders inflation monetary policy cost-of-living crisis economic recovery consumer prices home loan

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