Please click here to view Shane Oliver's views on the latest interest rate increase.

Key points raised are :

• The RBA hiked its cash rate for the third time this year by another 0.25% to 4.35% in response to inflation running above target and concerns that it will likely remain so for longer given price pressures partly flowing from the War with Iran, threatening higher inflation expectations.

• The key lesson from the 1970s is that the RBA is right to be focussing first on getting inflation back to target – as it will avoid even more pain down the track. 

• We are allowing for a further rate hike in August, but the longer the Strait of Hormuz remains blocked the greater the risk of recession allowing a return to rate cuts next year.

• The best things the Government can do in the Budget to help alleviate underlying inflation pressures is to lower the level of public spending and boost productivity.