Received

Mortgage holders will be feeling the squeeze this Christmas with the Reserve Bank delivering another 25 basis-point interest rate hike and alluding to further increases.

The final interest rate lift for 2022 takes the cash rate to 3.1 per cent, the highest level in a decade, and marks the eighth hike in a row.

The RBA has been lifting interest rates since May, to tackle rising inflation by increasing the cost of borrowing money in order to cool demand for goods and services.

For mortgage holders with variable rate loans, the 25 basis-point lift will ratchet up their monthly repayments, with three of the big four banks already passing on the rate hike in full. The Commonwealth Bank was yet to move on Tuesday evening.

Numbers crunched by RateCity show repayments have increased by $1251 since May for the average $750,000 loan with 25 years remaining.

Reserve Bank governor Philip Lowe said inflation was still too high, lifting 6.9 per cent over the year to October.

"The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that," Dr Lowe said.

The RBA's target for inflation is a band between two and three per cent.

Despite some speculation the central bank was approaching the end of its tightening cycle, Dr Lowe again said he expects further interest rate increases but also stressed the board "is not on a pre-set course".

"It is closely monitoring the global economy, household spending and wage and price-setting behaviour," he said, pointing to key sources of uncertainty informing its monetary policy response.

Treasurer Jim Chalmers said households were already suffering but the full impact of the interest rate hikes would not be felt immediately.

He said that's why growth is expected to soften next year.

"The Reserve Bank statement today makes it quite clear they also expect household spending to slow over the period ahead, although the timing and extent of this slowdown is uncertain," he told reporters in Sydney.

National growth figures will be released on Wednesday.

Shadow treasurer Angus Taylor said the government was failing to tackle inflationary pressures at the source.

"Whether it is their failure to resolve energy price pressures or failing to rein in spending, the inaction of this government is increasing pressure on the budgets of hardworking Australian families," Mr Taylor said.

The 0.25 percentage point rate hike was broadly expected, with evidence of a tight labour market and decent wages growth building the case for one more hike before the end of the year.

The fact the central bank board does not meet in January also added weight to the December hike as it acts as a natural pause.

AMP Capital's Shane Oliver said the RBA was likely at its peak, with a high risk of one final hike early next year.

"By early next year we expect the combination of a sharp slowing in domestic demand, increasing signs inflation has peaked and sharply weaker global growth which will in turn also drive inflation down will enable the RBA to keep rates on hold for an extended period," he said.

Housing Industry Association economist Tim Reardon said the latest rate hike was not necessary and would jeopardise the economy's soft landing.

"The RBA will not restore the economy to stable growth by putting the housing industry through boom-and-bust cycles," he said.

NAB Group Executive for Personal Banking Rachel Slade urged anyone finding rate increases a challenge to lean on their bank.

"At NAB, we have a dedicated team who listen to each customer's individual situation and are able to offer tailored solutions - whether that be a reduced payment arrangement, payment break or restructuring their loan," she said.

"Regardless of who you bank with, I encourage people to speak to their bank early if they are concerned."

© AAP 2022

A 6.2-magnitude earthquake has rattled Indonesia's Bali and Java islands, the country's geophysics agency says.

The quake occurred off the southern coast of East Java province, at a depth of 10 kilometres and 305 kilometres southwest of Denpasar, Bali, the agency said, adding that it was not expected to trigger a tsunami.

Local authorities were checking for any damage caused by the tremors, which were felt strongly in East Java province and Bali, according to residents posting on social media.

It follows a magnitude 6.4 quake, at a depth of 118 kilometres, in the West Java area on Saturday.

While there were no reports of damage or casualties, Saturday's quake was felt in the capital Jakarta, more than 280km from the epicentre.

More than 300 people were killed in November when a shallow 5.6 magnitude quake hit West Java's Cianjur.

© RAW 2022

Mortgage holders will be feeling the squeeze this Christmas with the Reserve Bank delivering another 25-basis-point interest rate hike and alluding to more increases to come.

The final interest rate lift for 2022 takes the cash rate to 3.1 per cent - the highest level since 2012 - and marks the eighth hike in a row.

The RBA has been lifting interest rates since May to tackle rising inflation by increasing the cost of borrowing money to cool demand for goods and services.

Governor Philip Lowe said inflation was still too high, lifting 6.9 per cent over the year to October.

"The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that," Dr Lowe said in a statement.

The RBA's target for inflation is a band between two and three per cent.

Despite some speculation that the central bank was approaching the end of its tightening cycle, Dr Lowe again said he expects further interest rate increases but also stressed the Board "is not on a pre-set course".

"It is closely monitoring the global economy, household spending and wage and price-setting behaviour," he said, pointing to key sources of uncertainty informing its monetary policy response.

Treasurer Jim Chalmers said households were already suffering, but full impact of the interest rate hikes would not be immediately felt.

He said said that's why growth is expected to soften next year.

"The Reserve Bank statement today makes it quite clear that they also expect household spending to slow over the period ahead, although the timing and extent of this slowdown is uncertain," he told reporters in Sydney.

National growth figures will be released on Wednesday.

Shadow treasurer Angus Taylor said the government was failing to tackle inflationary pressures at the source.

"Whether it is their failure to resolve energy price pressures or failing to rein in spending, the inaction of this government is increasing pressure on the budgets of hardworking Australian families," Mr Taylor said.

The 0.25 percentage point rate hike was broadly expected, with evidence of a tight labour market and decent wages growth building the case for one more hike before the end of the year.

The fact the central bank board does not meet in January also added weight to the December hike as it acts as a natural pause.

For mortgage holders with variable rate loans, the 25 basis point lift will ratchet up their monthly repayments.

Numbers crunched by RateCity show repayments have increased by $1251 since May for the average $750,000 loan with 25 years remaining.

© AAP 2022