Global shocks likely to drive more frequent interest rate changes, RBA says

Central banks will need to adjust rates more often to respond to unpredictable levels of inflation, Philip Lowe says

• Get our morning and afternoon news emails, free app or daily news podcast

Inflation is likely to become more volatile in the future as globalism retreats and climate shocks mount, requiring central banks to adjust interest rates more often, the Reserve Bank governor has said.

Philip Lowe, in a Committee for Economic Development of Australia speech in Melbourne on Tuesday, said the current spike in prices was soon expected to peak at around 8% before declining to a little over 3%" by the end of 2024. Improving post-Covid supply chains, cheaper commodities and the effects of interest rate hikes - with more possible - would combine to rein in inflation.

Sign up for Guardian Australia's free morning and afternoon email newsletters for your daily news roundup