Reserve Bank Governor Philip Lowe has warned inflation is increasingly coming from within Australia, rather than from global sources.
- The RBA thinks inflation will reach 7 per cent this year
- It says inflation is increasingly coming from within Australia
- It admits the bank suffered “reputational damage” when it tried to wind down its stimulus program
He says the RBA still thinks inflation will hit 7 per cent this year, up from 5.1 per cent currently, but it is monitoring the situation.
Mr Lowe has also admitted the RBA suffered “reputational damage” when it tried to wind back its COVID-19 pandemic stimulus program.
Speaking on Tuesday at an event in Sydney, the RBA Governor said the share of items in the consumer price index (CPI) basket experiencing annual price increases greater than 3 per cent was at its highest level since 1990.
He said the RBA has had to adjust its forecasts higher for retail electricity and gas prices, given the problems with energy supply on Australia’s eastern seaboard.
More to come.