Against this background, this morning the Board again decided to keep the cash rate steady at 1.5 per cent. We are seeking to be a source of stability and confidence, as further progress is made towards full employment and having inflation return to around the midpoint of the target range.
As that progress is made, you could expect the next move in interest rates to be up, not down. This would be a sign that overall economic conditions are returning to normal and would take place against the backdrop of stronger growth in household income.