RBA set to hike again as Chalmers warns Australians to brace for a difficult call

The Reserve Bank of Australia's board sits down Tuesday, and the betting is on another quarter-point increase that would push the cash rate to 4.85%. That would mark the fifth hike this year and the highest level in 18 years.

Treasurer Jim Chalmers told ABC's RN that Australians are bracing for a difficult decision. People are already stretched, he said, and any move today would bite harder because the full effect of previous hikes hasn't landed yet.

Prime Minister Anthony Albanese is defending his government's cost-of-living record from Saint John's, Antigua and Barbuda, where he's attending the Commonwealth heads of government meeting at King Charles's request. His absence on decision day has drawn criticism, but he said engagement abroad serves national security and strengthens the economy.

Chalmers also flagged that the government's expenditure review committee met Monday and will meet again Wednesday to hash out savings. A mid-year budget update lands in December, and he said savings have featured in all eight budget updates so far and will appear in the ninth.

Whatever the RBA decides independently this afternoon, Chalmers said there's more work to do to tighten the budget as much as possible. The central bank's announcement is due later today.