. the forward - looking indicators suggest further growth in jobs over the months ahead with vacancies at a very high level. our central forecast is for the unemployment rate to decline to below 4 per cent later this year and remain below 4 per cent next year. if this comes to pass, it would be a significant milestone. australia has not experienced unemployment rates this low since the early 1970s, almost half a century ago. the main source of uncertainty about the outlook continues to be covid - 19. the pandemic is not yet behind us and it is entirely possible that there will be more outbreaks. it also remains to be seen how households use all those savings that they have accumulated over the past two years. there are major geopolitical uncertainties and our largest trading partner, china, is working through a difficult adjustment in its property market. the sharp pick - up in inflation in parts of the 1 / 4 bis central bankers'speeches world, especially in the united states, has come as a surprise and is an additional source of uncertainty about the outlook. inflation for the first time in several decades, inflation has become a major issue in the global economy, although it is worth noting that inflation rates in most of asia remain low. in the united states, cpi inflation is running at more than 7 per cent and in the united kingdom it is expected to be at a similar rate soon. in germany, inflation is 5. 7 per cent and in new zealand it is 5. 9 per cent. these are the highest rates in decades and the higher inflation is turning out to be more persistent than earlier expected. this lift in inflation largely reflects the surge in global demand for goods during the pandemic coinciding with a reduced ability of the global economic system to produce and distribute goods. a related factor in a few countries, including the us and the uk, has been a decline in labour force participation, which has reduced the supply of labour and contributed to stronger wages growth. higher prices for petrol, electricity and gas have also pushed inflation up in many countries. in australia, we too have had higher inflation than we and others expected, although the increase here is smaller than in many other countries. in headline terms, inflation is 3½ per cent and in underlying terms it is 2. 6 per cent. we are feeling the effects of global supply - chain problems and higher oil prices, but we have not seen the same increases in goods prices as have occurred in the united states. it

glenn stevens : issues in payments systems remarks by mr glenn stevens, governor of the reserve bank of australia, to the annual general meeting of the australian payments clearing association, sydney, 23 october 2014. * * * thank you for the invitation to speak on the occasion of australian payments clearing association ’ s ( apca ) annual general meeting. the reserve bank and apca have a long history of working constructively as they carry out their respective responsibilities in australia ’ s payments system. we both have an interest in ensuring a safe, efficient and competitive payments system that meets the needs of end - users. when i last addressed an apca gathering in may 2012, we were at a particularly interesting juncture for the payments industry. the bank was approaching the end of a two - year period of public discussion and consultation about innovation in the payments system. this extensive public process, involving all the key industry players, and users of the payments system, had not been done before. after a roundtable attended by most members of the payments system board, numerous meetings at staff and management level, extensive feedback about published material and so on, the bank released the conclusions of its strategic review of innovation in the payments system in june of that year. the reserve bank regards that document, and the process that led up to it, as a landmark for the payments system in australia. interestingly enough, the innovation review was not mainly motivated by concerns, on our part, that innovation was not occurring, even though it was sometimes claimed that the regulatory regime inhibited it. on the contrary, we were seeing, and continue to see, rapid innovation in some elements of the system, as financial institutions, payment schemes and a variety of other players seek to deploy new technology to compete with one another or to draw business away from traditional payment forms like cash and cheques. the most obvious recent example is the use of contactless payments. in mid 2012 relatively few of us would have made a contactless payment. now they have become second nature to most of us and australia has become the leading contactless market in the world. while this does not represent a fundamental change in underlying payment systems, it is a quite significant change in the way consumers interact with the payments system and changes the cost of payments to both merchants and consumers. our recent diary survey suggests that the adoption of contactless has largely reflected a switch from traditional contact - based card presentment, but that there has also been some displacement of cash, particularly at smaller transaction sizes