The RBA has acted forcefully to get monetary policy back to a more normal setting with back-to-back 50 basis point hikes following the initial 25bp increase in May. The cash rate has increased by 1.25per cent in just nine weeks. This is the swiftest tightening cycle we have seen in Australia since 1994.

It is entirely appropriate and will do much to reduce the medium-term inflation risks Australia is confronting.