00:01The main reason is because inflation has been a little more persistent than the Reserve
00:06Bank previously thought and there are continuing concerns that inflation will continue into
00:13the future because of course we've got that ongoing conflict in the Middle East which
00:17is putting upward pressure again on some of our petrol and automotive fuel prices.
00:22We've also got an economy which is actually still relatively strong and these things are
00:28combining to sort of put together an inflation trajectory which is just a little bit worrying
00:33for the Reserve Bank. It's struggling to get inflation back down to its two to three percent
00:38target band even though it's certainly a little better than it was. It's still not back in that
00:41band. The other part of that is the labour market. Although it has loosened off a little bit the
00:48Reserve Bank does still seem to be concerned that it's a little tight and therefore also putting
00:53inflation through into the or creating inflationary pressures. So I think those two things combined
00:59mean that we're due unfortunately for another rate hike. The labour market is not red hot like it was
01:04back in 2022 when employers were really struggling to find the people that they needed and we can see
01:10that because the unemployment rate has shifted up a little bit. As you say it's gone up to four point
01:14six percent recently but it's still pretty healthy in the sense that that rise in the unemployment rate
01:21is not because people are losing their job. It's just because the new people who are coming into
01:25the labour force which is causing the workforce participation rate to be higher are not finding
01:30work straight away. So in net terms we're not seeing a loss of jobs. We're just seeing more supply,
01:36more people willing to put their their hands up for jobs and they're not quite getting the jobs as
01:41quickly as they had in the past. So I'd say that yes it's it's certainly indicating a labour market
01:47that's slowing but maybe not slowing enough as I said before for the Reserve Bank to be convinced
01:52that the economy will cool down enough to get its inflation number back in that two to three percent
01:57target band.
