This follows interest rate increases in both May and June when the RBA lifted rates by 25 basis points and 50 basis points, respectively.

The increase in rates this month was largely anticipated, with 93 per cent of the economists and commentators on comparison site Finder predicting an increase.

Prior to the announcement, AMP Capital chief economist Shane Oliver said 0.85 per cent was too low for an economy with a 3.9 per cent unemployment rate and inflation on its way to 7 per cent by year end.

“The RBA needs to continue raising rates for now to underline its commitment to returning inflation to its 2–3 per cent target range and ensuring that inflation expectations remain low,” said Mr Oliver.

Economist Saul Eslake agreed that the RBA now has a “heightened sense of urgency in getting the its cash rate to at least 2.5 per cent, and possibly higher, in order to give effect to its stated determination to get inflation down to its 2–3 per cent target range”.

My Housing Market economist Dr Andrew Wilson said the level of increase in interest rates has “become problematic” given the nature of the data released in recent weeks.

“Predictably disappointing wages data, low jobs growth, another fall in the participation rate, another sharp decline in the savings rate, falling disposable income levels, and a moderate GDP performance will be food for thought for the RBA who are hoping to avoid a hard landing in its attempt to curb inflation,” said Mr Wilson.

“Recessionary clouds are already gathering in other advanced economies that increased rates higher and earlier than Australia.”