Interest rates: Anthony Albanese says government working ‘arm-in-arm’ with the Reserve Bank of Australia

Already a subscriber?Prime Minister Anthony Albanese has rejected claims the federal budget is stoking inflation, insisting his government is working “arm-in-arm” with the Reserve Bank to curb price rises.

While the RBA expects that government energy bill subsidies will temporarily push headline inflation down to 3 per cent by the end of the year, this week it forecast inflation to shoot higher to 3.7 per cent in December 2025 when the subsidies end.A sharp rise in government spending is one of the reasons the central bank expects inflation to stay higher for longer.

“The stronger outlook for public demand reflects ongoing spending and recent announcements by federal and state and territory governments,” the RBA said in its latest statement on monetary policy.that the economy was still too strong and that government spending was prolonging the problem. “Labor has got itself into a vicious cycle, where it doesn’t take inflation on, it doesn’t have a fiscal strategy,” he said.“The reality is that Australia is absolutely at the back of the pack internationally on dealing with our home-grown inflation.

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