00:00Decided to increase the cash rate target by 25 basis points to 4.6%.
00:05Higher interest rates are needed to ensure inflation returns to target.
00:10Inflation is too high and has been driven by domestic capacity pressures.
00:14The inflation impulse from the Middle East conflict is in addition to this.
00:19Domestic spending and investment have been stronger than expected
00:22despite weak sentiment and the softening in housing market conditions.
00:27Productivity growth remains weak and the labour market remains a little tight.
00:32And outside of Australia, the global economy has also been more resilient than many expected.
00:38We're seeing signs that upside risks to inflation are materialising.
00:42The conflict in the Middle East has escalated again in recent weeks
00:46and oil prices have risen significantly.
00:49Disruptions to oil supply could last longer than anticipated
00:52and cause energy price pressures to last for longer than we previously assumed.
00:59Separately, the global AI investment boom has driven significant price rises
01:03for some inputs within the AI supply chain,
01:06including software costs and some commodity prices.
01:10These costs are now beginning to flow through to the prices faced by businesses and consumers.
01:15The AI boom is also adding to demand in the Australian economy
01:20at a time when we already have capacity pressures.
01:23Overall, these developments suggest that inflationary pressures will persist
01:27for longer than previously expected.
01:30Indeed, businesses in our liaison program continue to expect strong increases
01:35in their costs over the year ahead.
01:37Today's increase in interest rates is needed to slow the economy
01:41and return inflation to target.
01:44Now, I know this decision is difficult for households with a mortgage
01:47and businesses with loans,
01:49but high inflation hurts all Australians, especially the most vulnerable.
01:54Every household has seen how the price of everything has gone up in recent years.
01:58Pay packets don't go as far as they used to,
02:01and that's why we need to stop this high inflation.
02:04It's critical that we stop expectations for high inflation
02:08from becoming embedded in price-setting decisions across the economy
02:11or the problem will only get worse.
02:14That's why bringing inflation down is our priority.
02:17The Board will raise increased interest rates again
02:20if that's what's needed to get inflation down.
02:23The Board of Education
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