On Tuesday, Australia’s central bank delivered an interest rate hike which had been widely expected at the last policy meeting of 2022, as policy makers said more hikes will be needed to bring inflation back under control.

The Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to a 10-year peak of 3.1%. It was the eighth hike it has imposed in eight months.

In a Reuters poll, of 30 economists, all 30 had predicted a modest 25 basis point hike. It was the third in a row, following a series of more aggressive 50 basis point hikes.

Governor Philip Lowe said in a statement, “The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course.”

He went on, “The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labor market.”

Now the policy moves will pause until at least February when the next meeting will occur, giving policymakers the ability to assess the exact effect the 300 cumulative basis points rates have been hiked since May.

Signs of economic cooling have already begun to appear, as the monthly consumer inflation rate eased in October, although that does not include utility costs. It is expected the quarterly inflation series will peak at roughly 8% this quarter.

Following the policy decision, the Australian dollar rose slightly to $0.6729, due to the banks’ statement appearing slightly more hawkish than expected.

Markets have begun to expect a slightly higher peak interest rate, at about 3.6% by July of next year. The estimated peak rate had been 3.5% before the decision.