Reserve Bank of Australia raises rates to 18-year high

The Reserve Bank of Australia raised interest rates to an 18-year high on Tuesday to fight inflation, CNBC reports. It is the bank's fifth increase this year. The decision matched the expectations of economists polled by Reuters.

Before the decision, NSW Premier Chris Minns warned that a rate rise would cost jobs and force businesses to close. He said the federal government and the states should cut back spending to ease pressure on the economy, the Guardian reports. He said shops would "close that don't reopen".

The Guardian also reports that one Labor MP said voter anger over the economy was already high before the decision.

Treasurer Jim Chalmers told RN the government is working through spending pressures, economic forecasts and savings options for its mid-year budget update, due in December. He said there have been savings in all eight of its budget updates so far and there will be savings in the ninth. He said a rate rise would make life harder for people already under pressure, because the full effect of earlier rises has not yet been felt.