This includes the indirect wealth effects from house price gains mentioned in the previous section and the increased consumer spending from the run-down in household savings specifically, together with the healthy conditions in the labour market which have underpinned income growth. Looking ahead, as household spending growth moderates, demand-driven inflation pressure will abate.
However, if this adjustment occurs abruptly, precipitated by a sharp fall in house prices or a sharp increase in unemployment for example, there may be financial stability issues. In this case it will be the systemic stability remit of the Reserve Bank, rather than monetary policy which will come into focus. 7.