Inflation is not expected to return to the mid-point of the Reserve Bank of Australia’s target band until mid-2026, and it could take longer if a return to long-run labour productivity growth fails to eventuate.

The RBA’s latest quarterly outlook for the economy assumes inflation will fall to 3.3 per cent by June, just shy of the central bank’s 2 per cent to 3 per cent target range, but take another 18 months to fall below 3 per cent and more than two years to return to the middle of the band at 2.6 per cent.