changed environment. some other industries are struggling with the high exchange rate. meanwhile certain service sectors are growing quite smartly. hence, while the economy overall has recorded “ average ” growth, few sectors are in fact experiencing “ average ” performance themselves – some are clearly quite weak relative to average, while some others are much stronger. the bank is quite aware of these differences and the pressures they bring to businesses and individuals. but we also know that monetary policy cannot remove the forces generating different paces of growth in our economy. we have to keep our eye on the overall performance of demand and prices. we are acutely conscious that history may offer limited bis central bankers ’ speeches guidance in assessing the net impact of the disparate and very powerful forces that are at work. nonetheless, that is the assessment we must try to make. our most recent assessment was that, with growth near trend, inflation consistent with the target, interest rates about average and an outlook suggesting more of the same, the setting of policy was about right for the moment. of course, we continue to reassess things each month. my colleagues and i are here to respond to your questions. bis central bankers ’ speeches

raised interest rates by 25 basis points, and at the other three it held rates steady. up until the april meeting, the board had increased the cash rate at each of its meetings since may last year. in april, it left the cash rate unchanged at 3. 6 per cent. it did this to provide time to assess the impact of the earlier increase in interest rates. subsequently, the incoming data suggested that the inflation risks were moving to the upside and the board responded with further increases in interest rates in may and june. since then, at the july and august meetings, the board held the cash rate steady at 4. 1 per cent. again, this was to provide time to assess the impact of the increases to date and the economic outlook and the associated risks. 2 / 5 bis - central bankers'speeches the board is mindful that interest rates have been increased by a large amount in a short period of time and that there are lags in the operation of policy. monetary policy is in restrictive territory and it is working to establish a better balance between supply and demand in the economy. given this, and the uncertainties surrounding the outlook, the board judged that the right thing to do for now was to sit and assess. looking forward, it is possible that some further tightening of monetary policy will be required to ensure that inflation returns to target within a reasonable timeframe. whether or not this is the case will depend upon the data and the board's evolving assessment of the outlook and risks. it is encouraging that the recent data are consistent with inflation returning to target over the next couple of years. the data are also consistent with the australian economy continuing to travel along that narrow path that i have spoken about for some time – that path is one that leads to inflation coming down within a reasonable timeframe and the unemployment rate remaining below the levels of the past 40 years. there are, however, uncertainties and risks that we need to remain attentive to. i would like to highlight two of these. the first is the outlook for household consumption, given the large number of factors influencing household finances and spending at the moment. employment has been rising strongly, labour force participation is at a record high and people have been getting more hours of work. housing prices are also rising in most of the country, and some households built up large additional savings buffers during the pandemic that are still there. these are all positives. on the other hand, the decline in real incomes and