The board voted 6-3 to lift the target by 25 basis points, citing elevated inflation at 4.3%, domestic pressures, and higher fuel costs from Middle East conflicts.
This will increase average mortgage repayments by around $115 monthly, adding strain on households unseen since the late 1980s.
Prime Minister Albanese called rate hikes a blunt tool hurting borrowers, while critics blame $100 billion in federal spending since 2022 and urge cuts to outlays, net-zero policies, and migration.
