RBA lifts interest rates 

The Reserve Bank has made history, weighing into the politically-charged federal election campaign by raising interest rates to their highest in a decade. 

In a widely anticipated move, the bank lifted the official cash rate by 0.25 percentage points to 6.75 per cent this morning - the first time it has moved rates during an election campaign. 

Lenders are expected to respond quickly, lifting the standard variable mortgage rate above 8.5 per cent. 

The increase will add $67 a month to repayments on a $400,000 loan, bringing to $395 the cumulative impact of six interest rate rises since the last election, when the Coalition campaigned on a promise to keep rates low. 

The Coalition is expected to respond today by emphasising risks in the economy and the need to continue with an experienced pair of hands managing the economy. 

Labor will emphasise the now broken promise made to voters at the last election, when the Coalition promised it would keep interest rates at "record lows". 

Reserve Bank governor, Glenn Stevens, released a statement on the bank's website at 9.30 am outlining the reasons behind the decision. 

Inflation figures released last month all but sealed the deal on this morning's move after they showed underlying inflation running at an uncomfortable annual rate of 3 per cent. 

The bank has now raised rates 10 times since 2001 in an effort to cool a robust economy, basking in the strongest global backdrop in half a century. 

After 16 years of consecutive economic growth, Australia's economy has run out of spare productive capacity, raising the risks of a price breakout. 

RBA Raises Interest Rates