Paul Bloxham

Local activity indicators are continuing to show that growth is picking up. Retail sales are growing at their fastest rate since 2010, housing prices continue to rise at low double digit annual rates, forward-indicators suggest that residential construction activity is picking up pace and the business surveys report an improvement in conditions. This month also brought indications that the pick-up in activity is starting to feed through to a lift in employment. If coming months bring further signs of improvement in the labour market, this would start to suggest that the current very stimulatory setting of monetary policy may be unnecessary. A further pick-up in activity could also tilt the inflation risks to the upside and, with inflation already in the upper half of the target band, would suggest that rates may soon need to rise to keep inflation comfortably within the target band. I recommend that the cash rate is left unchanged this month, but looking forward, I see it as more likely than not that the cash rate will need to be higher than its current level in 12 months time.

Outcome date: 
Tuesday 01 April 2014
Current rate: 
12 months: 
6 months: 
Surname: 
Bloxham

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