Inflation is now forecast to fall back to 3 per cent by midyear and return to the 2 per cent target in 2024. Officials flagged falling three-month core measures as a signal that underlying price pressures have peaked.In the quarterly monetary policy report published alongside the decision, officials said the economy was still overheating.
Still, policymakers cautioned more increases might be needed if economic data surprised to the upside. The bank “is prepared to increase the policy rate further if needed to return inflation to the 2 per cent target”.– suggests policymakers are convinced the current rate is restrictive enough to restore price stability.
Globally, the economic outlook is improving amid Europe’s resilience during an energy crisis, China’s reopening, and subsiding inflationary pressures from declining commodity prices and easing supply challenges.
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‘Real pressure’ on the RBA to ‘go hard on interest rates’Sky News Business Editor Ross Greenwood says the reality is, with annual inflation higher than expected, there’s a “real pressure” on the Reserve Bank to “go hard on interest rates”. The annual inflation released on Wednesday revealed that it now sits at 7.8 per cent. “These higher interest rates for many families means that at some point during 2023, there’s almost a brick wall or a cliff if you like that the families is going to hit which could curb their spending which then affects the overall economy,” Mr Greenwood told Sky News host Andrew Bolt. “That’s the grave fear of having this inflation higher for longer and then the Reserve Bank being forced to raise interest rates higher than what they otherwise might have.” not a word about robodebt If people were not in so much debt because they were foolish and self-indulgent inflation would not be such a problem. Go hard or go home
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