Unemployment had declined to a very low level, one which had not been seen for a very long time. Inflation in the March quarter was high. It was also higher than had been expected. In part, that was due to the effect of the invasion of Ukraine on commodity prices, particularly oil prices.
But high inflation had also become more broadly based, with underlying inflation rising to 3.7 per cent and pressures building in a number of non-tradable categories. There was also evidence – from the Bank's liaison program, as well as business surveys – that there had been a further lift in the growth of labour costs in March and April.