The Reserve Bank governor has told a gathering in Sydney the central bank won't tolerate elevated inflation for ever. But while Michele Bullock is aware that cost of living pressures is hurting some households badly she says a cut to the cash rate is still not yet on the cards.
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00:00In the fight to get inflation down, the RBA Governor has a message.
00:08It's premature to be thinking about rate cuts.
00:11For some home borrowers, the squeeze is getting too much.
00:15We estimate that around 5% are in a particularly challenging situation,
00:20where the combined total of their essential spending and scheduled mortgage repayments
00:24is more than their income.
00:26Inflation is draining family finances.
00:29Bills and groceries and childcare, like, everything's increased.
00:36The interest rates being hiked to fight inflation
00:39mean Isabel and her husband spend more than half their income on their mortgage.
00:44Families, households, you just have to tighten the purse strings,
00:47and it's like, how much tighter can we go?
00:50The Reserve Bank is not backing down.
00:53I understand that people are hurting from high interest rates.
00:56I do understand that it's actually high inflation that is really causing trouble.
01:01Some may ultimately have to make the very difficult choice to sell their home.
01:06On the weekend, Treasurer Jim Chalmers said high interest rates were smashing the economy.
01:12Economists agree.
01:14The reality is, sadly, that the economy is just out of balance,
01:18and to get back into balance, we need to feel a little bit of pain.
01:21Our economy is barely growing,
01:24but Ms Bullock wouldn't be drawn into a fight with the Treasurer.
01:29He's doing his job and I'm doing mine.
01:32And the Albanese government knows huge segments of the community are being squeezed.
01:37Their government should be making tough but necessary decisions
01:41to help support future economic growth, and that's what we've been doing.
01:45Today, the bank again expressed its vigour in pushing inflation down.
01:50Ms Bullock said she'd accept higher unemployment, job losses,
01:54if it helps to get that inflation rate lower,
01:57with a promise that the bank will do whatever it takes, even raising rates further.