Australia’s central bank, the Reserve Bank of Australia (RBA), has defied expectations by raising interest rates by 25 basis points. This increase brings the interest rate to 4%, the highest it has been in over a decade.

The decision was made to combat rising inflation, which has been steadily increasing due to a strong economy and a shortage of skilled workers. The RBA hopes that the rate rise will help to slow down the economy and bring inflation under control.

Many Australians are concerned about the impact that the rate rise will have on their mortgages and other loans. The RBA has acknowledged these concerns, but believes that the benefits of the rate rise outweigh the negative impacts.

The RBA has also warned that there may be further rate hikes in the future if inflation continues to rise. This has caused some uncertainty in the markets, with investors unsure of how the economy will react to further rate increases.

Despite these concerns, the Australian government has expressed support for the RBA’s decision. In a statement, Prime Minister Scott Morrison praised the bank for taking decisive action to address inflation.

Overall, the rate rise has been met with a mix of support and concern from Australians. With the possibility of further rate hikes in the near future, it remains to be seen how the economy will respond to these changes.