The Reserve Bank of Australia raised its cash rate target from 4.60% to 4.85% on November 3, 2026. The Monetary Policy Board’s decision records a six-to-three vote. Six members backed a 25-basis-point increase and three preferred to keep the target at 4.60%. The published vote establishes the alternatives the Board considered at this meeting and the one it chose.
The decision appeared alongside the RBA's November economic forecasts. Those forecasts describe how the economy could develop under a set of assumptions, including an assumption about interest rates drawn from market pricing. The new 4.85% target is a Board decision. The projected path for inflation and unemployment is an assessment that can change as incoming evidence changes. That distinction helps when a single headline appears to turn all the numbers in both documents into promises.
The size of the increase and the level of the rate
A basis point is one hundredth of a percentage point. Add 25 basis points, or 0.25 percentage points, to 4.60% and the result is 4.85%. The first figure is the increase. The second is the level after the change. That arithmetic can help a reader reconcile headlines even when one uses basis points and another uses percentages.
The target concerns overnight funds in the money market. A household might encounter several other figures on the same day, including a mortgage rate, a savings rate or a lender's advertised rate for new customers. Those describe different arrangements. The Board sets the cash rate target, while the terms of an individual bank product determine which rate that customer pays or earns and when it can change.
This distinction also applies to dates. The announcement date tells you when the decision was published. A bank notice may separately give the date a new product rate starts. Comparing an older rate page with a new release can produce a temporary mismatch if one still reflects the previous meeting. For the November decision, start with the dated Board release and use the other figures only for the specific products or periods they describe.
Why the Board raised the target despite signs of slower growth
The Board's statement points to inflation across a range of goods and services. Higher fuel and other commodity prices linked to the Middle East conflict affected the outlook, and the RBA also judged domestic capacity pressures to be tighter than it had previously estimated. The Board cited signs that businesses were passing some fuel costs through to other prices. It saw a greater risk that expectations of higher inflation would become established.
At the same time, the RBA described an economy already slowing, falling housing prices and higher unemployment. The November policy overview connects tighter financial conditions and a weaker housing market with softer growth. These observations can sit together because spending, employment and prices do not all respond at the same speed. Some costs can rise even as households and businesses slow their spending.
The rate decision reflects the Board's assessment that further tightening was warranted to return inflation to target. It does not reveal the individual reasoning of the three members who preferred to hold. The published vote identifies their choice at this meeting. Any fuller account of the discussion should come from the minutes when the RBA releases them, rather than from assigning motives based on the tally alone.
What the forecasts say about the inflation target
The November statement in brief says inflation is expected to return to the middle of the 2–3% target range in mid-2028. The detailed overview projects headline and underlying inflation above 3% through the end of 2027. Reaching the top of the band and reaching its midpoint are two different milestones. Reading the date without checking which of the two it refers to can make two parts of the same report seem inconsistent.
The Board’s statement also compares the new outlook with the earlier forecast. It places the return to the top of the range around three quarters later than previously forecast. That revision is part of the context for the November decision. It says how the staff's assessment changed as it incorporated new information about fuel, costs and capacity. It does not mean that prices observed today already follow the forecast path.
A further distinction is between the rate at which prices rise and the level of prices. If inflation slows, an index can still be higher than it was a year earlier. Prices would then be rising less quickly. A forecast of inflation easing towards the middle of the range therefore describes the projected pace of change across the basket, rather than a return to past prices.
How the forecasts are built
The RBA's detailed outlook sets out assumptions behind the projections. The policy overview identifies October 28 as the date for the financial-market pricing used in the cash rate assumption. It also identifies an exchange-rate assumption based on that date. These inputs let the staff put numbers on a possible path for demand, prices and employment. They can change independently of the Board's published decision.
One way to read the outlook is to pick a number and ask who supplied it and what it measures. The 4.85% target came from the Board vote on November 3. A future rate implied by market prices reflects what was priced at the time the forecasts were prepared. A projected inflation rate is a staff estimate built using assumptions that include that pricing. The three figures may appear in the same package even though they describe different things.
Market pricing can move after an announcement. That does not change the inputs that were used to produce a forecast published that day. It changes the market information available to someone reading it later. For a comparison across forecast rounds, note the date of the assumptions in each round and compare the projections for the same period. Comparing two pages on the day you open them can hide that the staff used different information cutoffs.
Why the jobs forecast and the unemployment forecast can move together
The RBA says employment is expected to keep growing while the unemployment rate rises. Those statements can coexist. The unemployment rate is the share of people in the labour force who are unemployed. If the labour force expands faster than employment, more people can have jobs while a larger share of those looking for work remain unemployed.
For an illustration, imagine a labour force of 100 people with 95 employed and five unemployed. If it grows to 105 people and employment rises to 98, the number employed goes up by three. The number unemployed also rises, from five to seven, and their share increases. This is an invented example to show the relationship. It does not describe the actual size of Australia's labour force or the RBA's estimate of employment growth.
The November outlook places unemployment a little above 5% at the end of 2028. The figure belongs to a forecast horizon. The Board's observation that unemployment had already risen refers to recent data. Reporting the end-2028 projection as though it were the unemployment rate on November 3 would conflate those two statements. When checking a chart, identify where the historical series ends and where the forecast begins.
Why the housing and investment paragraphs can point in different directions
The Board expects higher rates and lower housing prices and turnover to weigh on household consumption and dwelling investment. The release also says overall business investment is forecast to be stronger in the near term than previously assessed, with data centre investment among the contributors. These statements concern different kinds of spending. The economy can slow overall while a particular segment continues to invest.
The housing discussion contains another distinction worth keeping. The prices of existing homes and the amount spent on dwelling investment are different measures. The Board described recent falls in prices and expected weaker housing conditions to affect future spending and activity. The two are connected in its outlook. A decline in house prices does not itself say how many homes will be built or how much any one household will spend.
The Board also described more resilient growth among trading partners than it had expected. Its release points to investment associated with artificial intelligence as one reason overseas growth held up despite the effects of the Middle East conflict. The Australian forecast can incorporate that source of demand while allowing for weaker spending at home. An overall growth forecast represents the combined effect of components that can move in different directions.
What an individual bank notice can tell a customer
The announcement explains the central bank's decision. A bank notice can give a different set of details, including the name of the product, the effective date of the change and the rate the bank has set. A statement from a lender about a variable-rate loan does not necessarily apply to every customer with a loan at that bank. A fixed-rate term and an account with a bonus interest condition involve different terms.
Consider an invented loan rate of 6.00%. If a lender increased it by the same 25 basis points, the new rate would be 6.25%. That is a calculation for a hypothetical rate, separate from the Board's move from 4.60% to 4.85%. The example does not estimate a payment or assert that a lender has passed on the change. A repayment calculation would also need the balance, the payment schedule and the remaining term, among other contract details.
Rate changes on savings products can also be expressed in basis points. The fact that two changes use the same unit makes them easy to compare, but the underlying rates may apply to different balances, start dates or eligibility conditions. The public RBA statement answers the question of what happened to the cash rate target. The written notice for the individual product answers which rate applies to that product and when.
How to compare the November release with an older decision
Find the date at the top of each decision and record the target immediately before and after the meeting. For November, that pair is 4.60% and 4.85%. If an older release also reports an increase of 25 basis points, the changes would be equal in size even though the resulting targets might differ. This is especially useful when a timeline shows the level in one column and the change in another.
Then compare the outlook for the same future period. An August forecast for late 2027 can be compared with a November forecast for late 2027. Comparing an August forecast for the end of 2026 with a November forecast for the end of 2027 would change both the forecast round and the period measured. The Board's comparison of when inflation would reach the upper edge of the band is useful because it holds the milestone constant. The later expected date tells you the direction of the revision without mixing that milestone with the midpoint.
What to look for in the next RBA documents
The RBA calendar lists the November meeting minutes for November 17. The release already provides the decision, the published split and the main considerations. The minutes can add detail about the discussion. A later statistical release can give a newer reading on prices, activity or employment. Each document has a date and a purpose.
The November release also identifies uncertainty around global energy supply and domestic activity. A scenario with higher inflation and weaker activity can differ from the central forecast. One can track how the RBA describes those risks as new information becomes available. The calendar is useful for knowing when more evidence is scheduled to arrive. It gives no result in advance.
For a separate example of how timing and product terms affect deposit rates, see the certificate of deposit maturity guide.
Read the decision, the projection and the product rate separately
The November Board vote moved the target up by 25 basis points to 4.85%. The associated outlook put the return to the middle of the inflation target range in mid-2028 under its forecast assumptions. A household product may carry a different rate and date, which are stated in its terms or its provider's notice. Reading each number beside the decision, forecast or contract it belongs to makes the November announcement easier to interpret as new information arrives.