Statement on Monetary Policy – November 2026
In Brief
Inflation is still too high and is now expected to stay high for longer. This is partly due to higher fuel prices, but a range of other prices and costs have also been increasing too quickly. The unemployment rate has increased and is expected to rise further, but the number of jobs is expected to continue to grow.
What is going on in the economy?
Inflation is still too high.
Spending has slowed, but prices and costs are still increasing too quickly across the economy. Housing prices have declined, and the unemployment rate has risen.
How do we see the economy developing?
The economy is expected to slow over the next few years.
The interest rate increases this year will help to slow spending in the economy further. Slower spending is needed to bring inflation down.
The unemployment rate is expected to rise over the next few years.
Although the unemployment rate is expected to rise further, the number of jobs is expected to continue to grow.
Inflation is expected to stay above target for longer.
The recent increases in global fuel prices as well as domestic price and cost pressures mean that inflation is not expected to return to the middle of the 2–3 per cent target range until mid-2028.
What did the Monetary Policy Board decide?
At its November meeting, the Board decided to increase the cash rate to 4.85 per cent.
The Board is conscious of the period in which inflation has been too high and remains focused on returning it to target.