RBA deputy governor Michele Bullock has appeared at an at times fiery parliamentary committee hearing.Credit:Alex Ellinghausen
Inflation is forecast to peak at 8 per cent by the end of the year,driven by higher energy prices and pricier fruit and vegetables after recent flooding in Victoria dealt another blow to the country’s farmers.
Bullock said it was imperative that inflation does not stay high for long and the bank was prepared to do what was necessary to get inflation back down to the 2 to 3 per cent range.
“We need to make sure that we’re keeping interest rates high and possibly increasing them to make sure that people understand that we will do what it takes,” she said on Thursday.
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The central bank has raised the official cash rate from the record-low 0.1 per cent to 2.85 per cent in just seven months,and is expected to raise rates by another quarter percentage point at its December meeting.
When Greens senator Nick McKim asked when interest rate rises would stop prices going up,Bullock said the bank could not predict that.
“Well,we don’t know,and this is the uncertain world we live in,” she said.