The RBA should increase the cash rate at its next meeting and communicate its intention to continue tightening policy until inflation is confidently inside the target band. While inflation has been slowing, it has proven to be quite persistent and the return to target much slower than anticipated. A prolonged period of time with inflation above the target risks a de-anchoring of inflation expectations from the target which would make stabilising inflation harder down the track. Policy should put more weight on the risks associated with doing too little. Because of this I would suggest increasing the cash rate.