Australia’s central bank on Tuesday raised its cash rate to a 15-year high of 4.60 per cent in its fourth rate hike of the year, saying inflation was too high and warning it was prepared to tighten further if needed.

Wrapping up its September policy meeting, the Reserve Bank of Australia’s nine-member board voted unanimously to lift rates by 25 basis points, bringing the total tightening this year to a full percentage point.

The board said some of the upside risks to inflation flagged in August were now materialising, with global energy prices running much higher than assumed, partly due to the broadening conflict in the Middle East, while AI-related demand was pushing up technology goods prices.

Core inflation was running at 3.6 per cent in July, well above the RBA’s 2 to 3 per cent target range, and markets had wagered heavily on an increase. Investors are now priced for at least one more hike, possibly in November.

For households, the pain is real: the average borrower with a $736,259 home loan is paying about $427 more a month than in January, or roughly $5,124 a year, according to Australian mortgage data.