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The genius of a master trainer and the brilliance of her jockey have elevated Verry Elleegant to champion racehorse status after a stunning Melbourne Cup win.

Verry Elleegant became the first mare since the legendary Makybe Diva in 2005 and the 14th overall to win Australia's most-celebrated race.

And she did it in a way that confirmed Chris Waller's reputation as a trainer without equal and James McDonald as a jockey that is as gifted as any rider in the world.

Famous for engineering the record-breaking exploits of Winx, Waller claimed his first Melbourne Cup win as Verry Elleegant beat Incentivise and the UK stayer Spanish Mission.

If Winx shaped Waller as a trainer, Verry Elleegant has helped the former New Zealander, who runs stables in Sydney, Melbourne and Brisbane, seal a decade of excellence in Australian racing.

"(Winx) took everything to a different level altogether," Waller told Network Ten.

"She probably made me as a person and gave me the confidence."

Waller now has in his possession one of Australian sport's most prized trophies to go alongside Winx's four Cox Plates.

He launched Verry Elleegant's Cup bid from this year's Cox Plate when she ran third but not before waiting until the 11th hour to add the reigning Australian horse of the year to his Flemington team.

Verry Elleegant finished seventh in last year's race and Waller's decision to try his luck again handed McDonald a Cup lifeline.

McDonald was set to ride Away He Goes before the UK horse was scratched, allowing him reunite with one of his favourite horses.

"I love her to bits. She's been so good to me. They can safely say she's a champion now," McDonald said.

Starting an $18 chance, Verry Elleegant swooped on the short-priced favourite Incentivise ($2.90) at the 200 metres and raced away for a four-length win.

Incentivise, who was momentarily hailed the winner at the top of the straight, held on for second with Spanish Mission ($10) a long neck away third.

McDonald had Verry Elleegant positioned midfield with cover and followed Spanish Mission into the race.

Her turn of foot put paid to Spanish Mission and she sustained the sprint to sweep past Incentivise.

"It was the longest 200 metres of my life," McDonald said.

"I've seen Incentivise fight so hard. So I knew once he was covered, although it was a fair way to the post, I was hoping that it would come up with our nose in front."

Incentivise went down swining as the Caulfield Cup winner was trying to stretch a winning sequence to 10 races.

"It was a courageous effort," jockey Brett Prebble said.

"His first time to this trip and it took a champion to beat him."

Craig Williams had nothing but admiration for Spanish Mission after the English stayer took Verry Elleegant into the contest.

"When Verry Elleegant came around me, she was towing. My horse did a really good job and was fighting it out for second," Williams said.

Last year's winner, the Irish-trained Twilight Payment, was ridden from midfield and never raised hopes of back-to-back wins in finishing 11th of the 23 runners.

"He wasn't able to get into his usual role and at the halfway point he really struggled," jockey Jye McNeil said.

The Melbourne Cup was run in front of 10,000 fully-vaccinated racegoers after Victoria's coronavirus restrictions were lifted in time for reduced crowds during the spring carnival.

© AAP 2021

The Reserve Bank of Australia has left the cash rate at 0.1 per cent after its monthly board meeting, and has indicated a rate hike is still some time away, defying the expectations of financial markets.

However, there was a slight change of wording in RBA governor Philip Lowe's post-meeting statement on Tuesday, having for months saying a move was unlikely before 2024.

He still wants to see actual inflation sustainably within the two to three per cent inflation target, which will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

"This is likely to take some time. The board is prepared to be patient, with the central forecast being for underlying inflation to be no higher than 2.5 per cent at the end of 2023 and for only a gradual increase in wages growth," he said.

Financial markets and some economists have been speculating on a possible rate rise as early as next year following last week's inflation data showed the underlying measure had jumped to 2.1 per cent and within target.

This was the strongest result in six years.

Dr Lowe said inflation has picked up, but in underlying terms it is still low and only a gradual increase is expected.

"The main uncertainties relate to the persistence of the current disruptions to global supply chains and the behaviour of wages at the lowest unemployment rate in decades," Dr Lowe said.

However, the central bank is no longer targeting the three-year bond yield aimed at keeping market rates in line with the cash rate, but will retain its bond buying regime at $4 billion a week until at least mid-February 2022.

"The decision to discontinue the yield target reflects the improvement in the economy and the earlier-than-expected progress towards the inflation target," Dr Lowe said.

"Given that other market interest rates have moved in response to the increased likelihood of higher inflation and lower unemployment, the effectiveness of the yield target in holding down the general structure of interest rates in Australia has diminished."

The RBA will release its quarterly statement on monetary policy on Friday, and Dr Lowe revealed some of the forecasts it will include.

The central bank is now expecting growth of three per cent over 2021, down from a forecast of four per cent it made three months ago.

However, for 2022 it now sees growth of 5.5 per cent, up from 4.25 per cent previously.

"The Australian economy is recovering after the interruption caused by the Delta outbreak," Dr Lowe said.

"As vaccination rates increase even further and restrictions are eased, the economy is expected to bounce back relatively quickly."

The unemployment rate is expected to trend lower over the next couple of years, reaching 4.25 per cent at the end of 2022 and four per cent at the end of 2023.

It was 4.6 per cent in September.

© AAP 2021

The Reserve Bank of Australia has left the cash rate at 0.1 per cent after its monthly board meeting, as widely anticipated by economists.

However, the central bank is no longer targeting the three-year bond yield, but will retain its bond buying regime at $4 billion a week until at least mid-February 2022.

Governor Philip Lowe reiterated the RBA will not increase the cash rate until actual inflation is sustainably within the two to three per cent inflation target.

However, there was a slight changing in the wording for the timing of such a move, having for many months not expected these conditions to evolve before 2024.

"This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently," Dr Lowe said in his post-meeting statement.

"This is likely to take some time. The board is prepared to be patient, with the central forecast being for underlying inflation to be no higher than 2.5 per cent at the end of 2023 and for only a gradual increase in wages growth."

The governor will be holding a rare webinar for the media at 4pm AEDT.

© AAP 2021