Just a month after the Reserve Bank of Australia (RBA) kept rates on hold — to assess the economic fallout from an unprecedented string of 10 consecutive rate hikes — on Tuesday afternoon it shocked most experts with another rise.
The decision was taken at an RBA board meeting in Perth — the first time since before the pandemic that the bank had made it to the West — and governor Philip Lowe spoke at a dinner filled with business leaders to explain why the pause was so short.
"We have seen further evidence that the Australian labour market is still very tight, that services price inflation is proving to be uncomfortably persistent abroad, and that asset prices — including the exchange rate and housing prices — are responding to changes in the interest rate outlook," he told the gathered crowd.
