Episode Notes

The Reserve Bank has raised the cash rate to a 15-year high of 4.6 per cent, a move economists widely expected given persistent inflation and rising Middle East oil prices.

Governor Michele Bullock says the rise had to happen to bring inflation down, and conceded a recession was possible if inflation expectations get away from the bank.

Economist Cherelle Murphy from EY Oceania says the reasons behind high inflation are not easy to reverse, and further rate rises can't be ruled out.