There will be further interest rate rises, RBA governor Philip Lowe has confirmed, but the size and pace of those hikes are not set in stone and will respond to changing data.
“The RBA will do what is necessary to make sure that higher inflation does not become entrenched and we are committed to returning inflation to the 2 to 3 per cent target range,” he told parliament’s economics committee.

Australians are facing an economic environment of rapidly rising interest rates.Credit:Photo: Louie Douvis
“At some point, it will be appropriate to slow the rate of increase in interest rates and the case for doing that becomes stronger as the level of interest rates increases.
“As I have said previously, the size and timing of future interest rate increases will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.”
One source of uncertainty is consumer spending, Lowe said. Consumer confidence is low, and disposable incomes are facing pressure from higher inflation as house prices ease. But some households are also benefiting from a strong jobs market, and many are continuing to save at a higher rate than before the pandemic.
Loading
“In the face of these competing factors, the recent data suggests that spending has remained resilient so far,” he said.
“There is, though, considerable uncertainty as to how these factors will balance out over the months ahead and we are watching the situation carefully.”
Ensuring that stronger wage growth does not add to inflation will also be important, Lowe added.
The RBA boss said at the next meeting at the start of October, the board will consider increases of either 0.25 or 0.5 percentage points.
“The fact that we’ve raised interest rates quite a lot already increases the strength of the argument for smaller increases going forward. We’re closer to normal setting now, which means that the case for large adjustments and interest rates is diminished.”