Minutes of the Reserve Bank’s most recent meeting show it is worried inflation won’t come down fast enough without more interest rate pain.
The Reserve Bank has given a clear indication it could lift official interest rates at its meeting at the start of November while admitting the nation’s jobs market has turned, suggesting unemployment is likely to rise., showed board members discussed whether to lift rates further.
“They noted that while rising housing prices alone would not warrant tighter policy, the associated rise in household wealth could support consumption by more than currently assumed, especially if housing turnover were to pick up more quickly than expected.” The minutes included for the first time a statement about the bank’s preparedness to tackle inflation if it remained elevated, in a clear sign the November meeting – to be held on Melbourne Cup Day – could result in another rate hike.“The board has a low tolerance for a slower return of inflation to target than currently expected,” it said.
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