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

services has meant that labour markets have been resilient and remain tight. here in australia, employment growth has been strong and the unemployment rate has been 1 / 5 bis - central bankers'speeches close to around 3½ per cent for a year now, which is the lowest level of unemployment for almost half a century. the participation rate is also at a record high, and many women and young people are benefiting from this. this is one of the positive legacies of the policy response to the pandemic and it is something we should all welcome. the recent data indicate that there has been some easing in the labour market, with firms reporting that it is less difficult to find workers than it was late last year. nonetheless, employment growth is still strong at a time of rapid population growth. we expect employment to continue to grow, but below the rate of growth in the labour force. as a result, the unemployment rate is forecast to rise gradually to reach around 4½ per cent late next year. the australian economy is currently experiencing a period of below - trend growth and this is expected to continue for a while yet. many households are facing a painful squeeze on their budgets and consumer demand has slowed considerably, not least because high inflation is eroding people's real incomes. the increase in interest rates is also weighing on disposable incomes for many households, although others are benefiting from the higher interest earned on their savings. the rba's staff are working hard to look beyond the aggregate figures and to understand where the financial pressures are most acute and the impact these pressures are having on people. it is clear that some households who borrowed at low interest rates during the pandemic are finding conditions very difficult, as are some renters. looking forward, the bank's central scenario is that economic growth remains subdued for the rest of this year before gradually picking up to around 2¼ per cent by end 2025. the ongoing moderation in inflation will mean that real incomes start rising again and this will ease the financial pressures that people are feeling. business investment has also been in an upswing as firms respond to the pressures on capacity utilisation. and dwelling investment is expected to increase again next year, after the recent difficulties in that sector. recent monetary policy decisions i would now like to turn to the reserve bank board's monetary policy decisions since the previous hearing in february. since that hearing, there have been six board meetings. at three of those the board