The news on Thursday of an unemployment rate for June of 4.3 per cent should ring alarm bells at the Reserve Bank’s Martin Place headquarters.

The jobless rate has risen to its highest level since November 2021, which was smack bang in the middle of the Covid-19 pandemic.

The board should have cut the cash rate at its last meeting. What is it waiting for? A good, old-fashioned recession?

As explained in my recent column in The New Daily, the Reserve Bank board is deliberately keeping the cash rate well above its own estimate of the neutral rate – the rate that is neither stimulatory nor restrictive. Its estimate of the neutral rate is 2.7 per cent. But the cash rate is much higher, at 3.85 per cent, making it very........

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