RBA SoMP: considered the option to continue to hold policy rates steady but decided a hike would provide more assurance on inflation; Whether further tightening of monetary policy will depend on data

ECONOMY

• The data received over recent months indicate that the domestic economy has been a bit stronger than previously thought and capacity utilisation remains high.
• The labour market remains tight and, while wages growth looks to have stabilised overall, unit labour costs are still growing very strongly.
• New loan approvals have been increasing and housing prices have been rising across the country.
• Consumer prices are rising briskly, particularly in market services and rents, and the inflationary pressures in these components are expected to take some time to dissipate.

INFLATION

• There are both upside and downside risks to the outlook for inflation.
• With inflation remaining high and forecast to decline more gradually than anticipated three months ago.

FORECASTS

Via RBA