Reserve Bank governor Philip Lowe after a press conference at the RBA head office in Sydney.

RBA governor warns Australians to brace for higher inflation and slower growth

The Reserve Bank governor has warned that life will continue to be difficult for policymakers – which likely means most households and businesses too.

After almost three decades of low and stable inflation, which has generally stayed within the Reserve Bank’s target range of 2% to 3%, central bankers have been surprised by the rise in inflation over the past year and a half.

“An inflation rate of 7 or 8 per cent was something that was widely believed to have gone down in the history books,” RBA Governor Philip Lowe said at Australia’s annual Economic Development Committee dinner.

“That’s why the current hyperinflation is quite a shock.”

Mr Lowe again warned that it was important to rein in inflation quickly before expectations of higher prices set in, as doing otherwise would be much more difficult and economically damaging than it was in the 1980s and early 1990s.

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