Australia news LIVE: RBA hikes interest rates to 4.35 per cent; Xi says China and Australia have ‘worked out some problems’

Prime Minister Anthony Albanese has just been asked about the rate rise during a press conference in Beijing.

“We need to be engaged because we know that impacts of the global economy on energy prices, for example, feed through into the Australian economy,” he said.

“That’s why a major focus of this visit has been on Australian job creation, on the benefit that we can get by dealing with the impediments to our trade, which have been there. We’re very focused on Australian jobs and the Australian economy and Australian living standards, which is why we continue to have as our number one priority cost of living relief.”

Peter Hartcher’s opinion piece on how Australia had a choice with China to kowtow or stand up and made the right call is sparking much debate with subscribers.

@jk says: “Good balanced approach by Albanese. It’s good to finally see Australia chart a right balance between the big powers to the benefit of Australians, just like Singapore and NZ. A reasonable and mutually respectful relationship between two countries.”

@Stratos writes: “This is the first chapter in a long book which will test our resolve for decades to come. Beijing plays the long game while we stumble our way through policy shifts from election to election. Not sure President Xi has reversed anything.”

Anthony Albanese greets China’s Chairman of the National People’s Congress Zhao Leji at the Great Hall.Credit: AAP

@Mick says: “Morrison could not have handled our fallout with China any worse if he tried. Let’s not pretend otherwise. It caused billions of dollars of damage to the Australian economy and the Liberal party should be reminded of this before every election.”

But @MacsDave has a different take: “About time a few journalists acknowledged the previous LNP government’s massive achievements in standing up to China in Australia’s national interest. Watching Albo and co in China with lobster in hand, getting praise for “repairing the relationship” speaks volumes re: the general public’s ignorance of the entire issue. It will be very interesting to see how Albo responds to a Chinese issue of the scale the previous LNP governments had to deal with (Huawei, list of 14 demands, Covid) … It looks like the Chinese have warmed him up nicely and following the Voice embarrassment, the Chinese would know that any damage to the China-Australia repair in relationship would be very damaging politically.”

What do you think? Let us know here.

Use our mortgage repayment calculator here to see what Tuesday’s increase of 25 points means for your repayments.

Enter your loan amount, the length of your loan, your existing interest rate, then click the +0.25 per cent rise for the latest hike to get your extra monthly repayment.

Illustration:Credit: Aresna Villanueva

Calculations are based on monthly fixed interest rate increases on principal loan amount excluding requisite monthly repayments, adjustments to repayment amounts, or additional repayment instalments.

Without A Fight has won the 2023 Melbourne Cup at Flemington today.

Sam Freedman, who trained Without A Fight with Anthony Freedman, said the result was “extraordinary”.

Without A Fight has won the Melbourne Cup.Credit: Channel 10

“He got him onto the rail from a wide gate, relaxed, swam him off and pretty confident probably the 800 metres he was travelling,” Freedman told Channel 10.

Meanwhile, Right You Are will be assessed by Racing Victoria’s veterinary team after failing to finish the race.

In other news, the Melbourne Cup is due to begin any moment.

You can follow our live coverage of the race here.

Treasurer Jim Chalmers says he understands the rate rise will be difficult for mortgage holders, and that the government is doing its bit to reduce inflation.

“This will make life harder for people who are already doing it tough,” he said at a press conference following the RBA board’s decision to lift interest rates.

“Inflation has moderated in our economy since those peaks that we saw last year, and our economy has slowed. But inflation is still a feature of our economy.

Treasurer Jim Chalmers at a press conference last month.Credit: Alex Ellinghausen

“Now, the primary driver of inflation in the most recent data was petrol, but there are other inflationary pressures in our economy as well, [and] the Reserve Bank is responding to that.”

The treasurer said everyone wanted inflation to moderate further, and the government had the same goals as the Reserve Bank but a different job to do.

“The Reserve Bank’s job is to address this inflationary challenge without crunching the economy, I am focused on my job, which is a distinct and complimentary job when it comes to fighting inflation,” he said.

“Rolling out cost-of-living relief in a way that puts downward pressure on inflation, rather than add to our inflation challenge. We have got the budget in much better nick … [and] the first surplus in 15 years is part of that effort.”

Banks and real estate investment trusts dragged the Australian sharemarket lower after the Reserve Bank raised interest rates this afternoon.

The S&P/ASX 200 remained mostly unchanged, dropping 14.2 points, or 0.2 per cent, to 6983.2 just after the Reserve Bank’s decision to lift the cash rate by 0.25 percentage points to 4.35 per cent at 2.30pm AEDT, with information technology and healthcare companies trading in the green.

All four big banks traded lower, weighing down the financial sector (down 0.8 per cent) with CBA shedding 0.3 per cent, NAB losing 0.8 per cent, ANZ dropping 1 per cent and Westpac slipping 2 per cent, the latter following a rally on Monday after it revealed a $7.2 billion profit.

Real estate investment trusts (REITS) were also weaker as Scentre (down 2.3 per cent) and Dexus (down 2.3 per cent) slid lower.

Other interest rate-sensitive sectors continued their climb despite the rate decision, with healthcare stocks (up 0.7 per cent) among the strongest on the local bourse including Pro Medicus (up 2.9 per cent) and Cochlear (up 1.3 per cent). IT stocks (up 1 per cent) were also stronger as heavyweight WiseTech advanced 1.9 per cent.

The Australian dollar dropped slightly, fetching $64.63 at about 2.40pm AEDT.

Bullock said the latest inflation data showed that while goods inflation was falling, the price of many services was continuing to rise.

“Since its August meeting, the board has received updated information on inflation, the labour market, economic activity and the revised set of forecasts,” she said.

“The weight of this information suggests that the risk of inflation remaining higher for longer has increased.”

It’s the first interest rate rise since June, when the bank lifted the cash rate by a quarter of a percentage point to 4.1 per cent.

Bullock noted the economy had also been more resilient than expected over the first half of the year, noting the unemployment rate remained low and house prices were continuing to rise.

She said whether the RBA would need to raise rates even further would depend on any new economic data and evolving risks, including developments in the global economy.