The RBA keeps hiking interest rates – but are the rate rises actually working?

AI desk brief

The RBA’s four rate hikes to 15-year highs have not yet clearly restrained Australian household spending, raising the risk of further tightening if inflation stays sticky. Household spending is still running nearly 7% above a year ago, while inflation was 4% in August, boosted by fuel, food and construction-related pressures.

The article argues the transmission from higher mortgage rates to spending may be weaker than the central bank expected, with most borrowers still meeting repayments despite higher funding costs and some 2% of borrowers struggling with essentials. For metals, the near-term read is mixed but tilts toward firmer rate expectations and sustained policy pressure rather than an imminent dovish pivot.