Punters on Tuesday were far less focused on the Reserve Bank’s movements than usual – probably because the bank’s interest rate decision was far more predictable than the outcome of the race that stops the nation.

Most Australians have much more of their money flowing towards interest payments on their home loans – or stacking up in savings – than betting on the winning horse at the Melbourne Cup.

The Reserve Bank might have it wrong, but it wants Australians to stay calm.Credit: Matt Davidson

But the Reserve Bank’s decision to keep rates on hold this week came as so little surprise that even the eager throng of journalists throwing questions at the bank’s governor, Michele Bullock, weren’t as packed into the press conference room as usual.

The more interesting news was the bank’s views on price pressures in the economy.

Over the past year, Treasurer Jim Chalmers – and, with more caution, the bank – started putting their worries about price pressures behind them. “Inflation now has a two in front of it,” Chalmers proudly declared on many occasions.

But the latest numbers, released last week, came as a surprise to most. Over the 12 months to September, inflation came in at 3.2 per cent – the highest rate since June last year.

Even trimmed mean inflation – a measure closely watched by the Reserve Bank that strips out the biggest price changes – stepped up, clocking in at 3 per cent over the same period: right at the top of the bank’s 2 to 3 per cent target range.

That’s a result Bullock has said the bank’s decision-makers aren’t satisfied with. “[Inflation] just below three [per cent] is not good enough for the board,” she said at the press conference.

That means until inflation settles back towards the middle of the 2 to 3 per cent target, Australian borrowers can kiss goodbye to the possibility of........

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