Markets were concerned about the loosening in fiscal policy, and became uneasy about the future direction of policy. This was reflected in a rise in long-term interest rates and a fall in the exchange rate, to which we responded by tightening monetary policy. Immediately, an editorial in New Zealand's largest daily paper noted that the Budget had "rekindled inflationary expectations.
Last week we committed to an action plan that further incorporates climate change considerations into our policy framework, recognising that the transition to net zero emissions has significant implications for the economy and for price stability. Fourth, we decided to make a step change in our communications, in particular with the public.