SYDNEY, Feb 3, 2026 (BSS/AFP) - Australia's central bank hiked its key interest rate Tuesday for the first time since November 2023, pointing to signs inflation is again gathering pace.

The Reserve Bank of Australia's move lifted the cash rate by 25 basis points to 3.85 percent.

Inflation has eased since a peak of almost eight percent in December 2022 but government figures indicate it is starting to creep up and the bank's monetary policy board said it was "likely to remain above target for some time".

"While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025," the board said in a statement.

Many Australian households remain burdened by the high cost of food, fuel, and particularly housing.