Bonds and shares sold off after a hawkish Reserve Bank of Australia raised the cash rate and pledged further interest rate increases ahead, wrong-footing investors who had wagered it would shift its tone and inch closer to a policy pause.

The central bank on Tuesday pressed ahead with a ninth consecutive increase to the cash rate, taking it to a decade-high of 3.35 per cent, from 3.1 per cent, and flagged multiple rises ahead to rein in high inflation despite some households experiencing “a painful squeeze”.