The Reserve Bank has increased interest rates by 25 basis points to 4 point 1 per cent.

The rate rise takes the cash rate to the same levels as a year ago.

The move was widely expected on financial markets, which had priced in a greater than 70 per cent chance of a rate hike today.

Economists at all four major banks are expecting the RBA will follow up with a third consecutive rate rise in May.

The United Nations is calling for an end to fighting along the Lebanese border as civilians bear the brunt of the conflict between Israel and Hezbollah.

Israeli troops have started limited ground operations in southern Lebanon in recent days to bolster forward defences against the Iran-backed militant group.

Meanwhile the United Arab Emirates has lifted the temporary closure of its airspace.

Earlier the UAE's defence ministry said it was responding ​to ⁠incoming missile and drone threats from Iran, but authorities now say the situation has stabilised.

Australia's women's soccer team will play for the rare opportunity to make a major final on home soil tonight when they face China in the first Asian Cup semi-final in Perth.

The winner will play either South Korea or Japan in Sydney in Saturday's final.

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The U-S President has lashed out at European allies over their less than enthusiastic response to his call to help secure the strait of Hormuz.

The threat of Iranian missiles and drones targeting oil tankers has effectively closed the Strait, since the US and Israel began air strikes.

German Chancellor Friedrich Merz says the war "is not a matter for Nato".

Australia has also ruled out sending ships to the Strait.

An emergency cyclone warning has been issued for far north tropical Queensland.

There is a high chance of a tropical cyclone developing later this week in the watch zone stretching from Lockhart River to Port Douglas.

The weather system is likely to make landfall between Cooktown and Lockhart River on Thursday, at a Category 3 intensity.Recent rainfall means catchments in the Far North are already saturated, so flooding risk is potentially high.

The Katherine, Beswick and Jilkminggan communities have officially transitioned from the emergency response to recovery phase, after major flooding hit the region, south of Darwin, last week.

All people who were taking refuge in shelters in Katherine have now left, however N-T Police say 37 houses in the town remain without power.

Meanwhile, Jilkminggan residents are set to return home when water levels on roads to the remote community recede.

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The reserve bank is weighing a tough choice to be revealed in hours that is set to have big repercussions on the cost of living for many Australians, as the war in the Middle East looms.

A new report from the Climate Council shows recent records for heat and rainfall are signs climate change is accelerating.

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Deputy prime minister Richard Marles is remaining coy on whether Australia will have to ration fuel if the conflict in the Middle East drags on.

Borrowers will find out this afternoon how the reserve bank has responded to global oil disruption and rising inflation as a result of the war.

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The war in the Middle East will be a big factor in today's interest rate decision that borrowers are nervous about. 

The competition watchdog is also meeting with fuel companies to look into recent fuel price hikes.

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US President Donald Trump has criticised allies who have rejected his requests for military help to secure the Strait of Hormuz.

In Australia the reserve bank will consider the conflict in the Middle East in its decision today on whether to hit borrowers with a second rates rise this year.

A damning independent review examining research and development in Australia has delivered its final report card.

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Economists expect the Reserve Bank of Australia will lift interest rates this afternoon for a second straight month, although there are some who predict they won't be changed.

The Middle East conflict is playing a big part and US president Donald Trump is having trouble convincing allies to help him open a crucial shipping strait.

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The war in the Middle East is set to shape a big interest rate decision in Australia while fuel and gas remain big talking points. 

Residents in Queensland already dealing with wet weather are now facing a potential cyclone.

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Listen to the latest updates from ABC News

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