RBA shocks with Melbourne Cup rate rise

| November 2, 2010

The Reserve Bank has delivered a surprise blow to borrowers by raising interest rates for the first time since May.

The central bank lifted the official cash rate by a quarter of a per cent to 4.75 per cent. Most economists had tipped the RBA would leave rates unchanged in November after the release of soft inflation figures last week.   

The Australian dollar soared nearly one US cent following the decision, to hit 99.8 US cents.