At its next meeting, the Board will have an updated set of economic forecasts from the staff as well as a revised assessment of the balance of risks. The Board will also have new readings on inflation, the global economy, the labour market and household spending to help inform its decision. Our priority remains to ensure this period of high inflation is only temporary.
High inflation hurts all Australians and damages the functioning of the economy. It erodes the value of savings, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people's expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment.