Reserve Bank Governor Philip Lowe has warned that inflation is increasingly coming from Australia, rather than from global sources.
Key points:
- The RBA believes that inflation will reach 7% this year
- He says inflation is coming more and more from Australia
- He admits the bank suffered “reputation damage” when it tried to end its stimulus program
He says the RBA still believes inflation will reach 7% this year, up from the current 5.1%, but is monitoring the situation.
Lowe has also admitted that the RBA suffered “reputation damage” when it tried to recover its COVID-19 pandemic stimulus program.
Speaking at an event in Sydney on Tuesday, the RBA governor said the proportion of items in the Consumer Price Index (CPI) basket that experience annual price increases of more than 3% was in its highest level since 1990.
He said the RBA has had to further adjust its forecasts for retail electricity and gas prices, given problems with energy supply on Australia’s east coast.
More to come.