The Reserve Bank has lifted the official cash rate for the fourth time this year, taking interest rates to a 15-year high.

Tuesday’s decision to raise rates by 25 basis points – as had been widely forecast – pushes the cash rate to 4.6 per cent.

Assuming banks pass on the increase, as they usually do, it will lift the average owner-occupier variable mortgage rate to 6.49 per cent. It will also add a further $91 a month to a typical $600,000 mortgage payment – or nearly $400 with all four of 2026’s rate rises.

“The true pain is in the cumulative impact,” Canstar data insights director Sally Tindall said ahead of the RBA announcement.

“Across what is likely to be at least four rate rises for the year, this borrower has to fork out an extra $364 a month compared to what they were paying at the start of the year.”

Rates have not been as high since October 2011, meaning today’s borrowers face the painful situation of the most expensive loans in a generation. Tindall said home loan debt had soared from $1.05 trillion to $2.51 trillion in the same time.

In its post-meeting statement, the bank board said the decision was unanimous. It flagged elevated inflation and heightened uncertainties about the outlook for domestic economic activity.

“Since the previous meeting, some of the upside risks to inflation are materialising,” it said.

“There have been further disruptions to global oil supply and recent data suggest that growth and inflation in Australia have been higher than expected. Higher fuel prices have partially been passed through to prices of other goods and services. This inflation impulse is in addition to the effect of capacity pressures in the economy.”

The board said it would do whatever was required to ensure inflation did not become “embedded”.

“The three increases in the cash rate target since the beginning of the year have tightened financial conditions and the economy appears to be slowing. But inflation is still too high and the board judged that … a further tightening in financial conditions is warranted,” it said.

“The board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed.”

Earlier, in repeated appearances on morning TV, Treasurer Jim Chalmers blamed the war in the Middle East for driving up inflation and cost-of-living pressures.

“That’s not an opinion, that’s a fact,” he said.

But Nationals leader Matt Canavan blamed out-of-control government spending.

“The problem clearly is too much government spending, too much heat in the economy,” he told News24.

The Coalition has said it would cut spending on the National Disability Insurance Scheme, aged care and childcare to help quell inflation.

A final budget update for the year, released on Monday, showed forecast tax receipts as a percentage of GDP jumped from May’s forecast of 23.6 to 24.1, showing growth.

But Chalmers was steadfast that government expenditure – now more than 26 per cent of GDP – was not the main reason for the rate rise, instead blaming global issues.

“We’ve got an inflation challenge in our economy, which is made much worse by the war in the Middle East. That’s not an opinion. That’s a fact,” he told Seven’s Sunrise.

“We’ve been able to manage our public debt to levels which are much, much lower than other countries. But we know that there’s always more work to do.”

HSBC chief economist Paul Bloxham sees falling house prices, slower consumer spending and weaker construction, exacerbated by higher interest rates, contributing to a rising risk that Australia’s economy will tip into a recession in coming quarters.

If the economy deteriorates further, the RBA’s resolve on getting inflation back to target might be tested.

Earlier on Tuesday, the Australian Bureau of Statistics revealed household spending growth was flat in August. But consumers were still on a strong footing.

On an annual basis, household spending was up 6.8 per cent, which indicated that the economy was still exceeding its supply capacity and further interest rates were needed, said EY Oceania chief economist Cherelle Murphy.

-with AAP