In the final board meeting for the RBA in 2022, the reserve bank has increased the cash rate by 25bps to 3.10 per cent.

In its minutes for the meeting, the board said inflation in Australia is too high (currently at 6.9 per cent) over the year to October.

“Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role. Returning inflation to target requires a more sustainable balance between demand and supply,” the board said.

The reserve bank expects a further increase in inflation over the months ahead, with inflation forecast to peak at around 8 per cent over the year to the December quarter, which is then expected to decline next year due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand.

“Medium-term inflation expectations remain well anchored, and it is important that this remains the case,” the board said.

“The bank’s central forecast is for CPI inflation to decline over the next couple of years to be a little above 3 per cent over 2024.”