The Reserve Bank of Australia must raise interest rates to ward off stagflation

If Paul Keating walked into a pet shop today, he might find the resident galah squawking about stagflation, the combination of high inflation and weak growth.

There’s no doubt inflation is too high. Over the year to March, petrol prices fuelled the already elevated domestically driven inflation to 4.6 per cent. And this follows inflation that hit 8 per cent in the post-pandemic party.

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