Australia raises interest rates to 4.85% as RBA Governor prepares to address media.

The Reserve Bank of Australia (RBA) has increased its benchmark interest rate by 25 basis points to 4.85%, bringing borrowing costs to levels not seen since 2008 as the nation’s central bank is in a fight with inflation.

This is the fifth rate hike so far this year and was announced as sky-high fuel and commodity prices, partly driven by the Middle East conflict, could keep inflation rates high.

Michele Bullock, the RBA governor, will face questions over the inflation outlook, the cost of household borrowing and the likelihood of further rate hikes in a press conference scheduled at 3.30pm local time.

September saw the inflation rate at 4.3% in Australia, above the RBA’s target band of 2-3%.

The board was divided, with six Monetary Policy Board members voting in favour of an increase and three voting for no change, the RBA said.

The most recent increase is also likely to put upward pressure on the cost of living and mortgage payments for households that are already under strain.