RBA: To take further steps in process of normalising monetary conditions over months ahead

Board expects to take further steps in the process of normalising monetary conditions over the months ahead.

Not on a pre-set path.

Global factors explain much of the increase in inflation, but domestic factors are also playing a role.

Board committed to doing what is necessary to ensure inflation returns to target over time.

There are widespread upward pressures on prices from strong demand, a tight labour market and capacity constraints in some sectors of the economy.

Rate increase a further step in the normalisation of monetary conditions.

Inflation is expected to peak later this year and then decline back towards the 2–3 percent range.

Key source of uncertainty continues to be the behaviour of household spending.

Bank's central forecast is for cpi inflation to be around 7¾ per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024.

Labour market remains tighter than it has been for many years.

Economy is expected to continue to grow strongly this year, with the pace of growth then slowing.

Some increase in unemployment is expected as economic growth slows.

Bank's central forecast is for GDP growth of 3¼ per cent over 2022 and 1¾ per cent in each of the following two years.