New Zealand's official cash rate has been lifted to 4.25%, the Reserve Bank announced on Wednesday afternoon.
The new OCR is an increase of 75 basis points from the previous rate of 3.5%.
It's the ninth consecutive time the Reserve Bank opted for a rates rise, and seventh increase in 2022 alone - February, April, May, July, August and October saw similar action.
An expert says it's the biggest increase since the OCR was introduced in 1999 - and there is still a real chance New Zealand could fall into a recession.
The Reserve Bank described the latest rate rise as "necessary".
"The Committee agreed that the OCR needs to reach a higher level, and sooner than previously indicated, to ensure inflation returns to within its target range over the medium term.
"Core consumer price inflation is too high, employment is beyond its maximum sustainable level, and near-term inflation expectations have risen," it said in a statement after the announcement.
"In New Zealand, household spending remains resilient, especially considering the rise in debt servicing costs, the fall in house prices, and low levels of consumer confidence.
"Employment levels are high, and income growth and household savings are supporting spending. The rebound in tourism is also supporting domestic demand."
The Reserve Bank hopes the move will help stem the tide of inflation.
ANZ chief economist Sharon Zollner told Breakfast this morning it's a factor in today's decision that the RBNZ won't meet again until February.
"Seen in that light, it's not really such an acceleration, but of course, it feels like one," she explained.
Impact on mortgage rates
Zollner said floating mortgage rates tend to move "one for one" with the OCR, while fixed mortgage rates are "a bit more unknown" and could even drop as a result of today's announcement, depending on what the RBNZ signals about future intentions.
"But it's certainly clear that interest rates are much, much higher than they were a year ago or eighteen months ago.
"And that hasn't been entirely expected by everyone so, it is a bit of a shock and as we've heard, people are struggling with the cost of living so it's a bit counter-intuitive to pile another greater cost of living on to people," she said.
"But the fact is, the only way to get on top of inflation is to actually cool spending down."