Prime Minister Anthony Albanese has rejected claims the federal budget is stoking inflation, insisting his government is working “arm-in-arm” with the Reserve Bank to curb price rises.

After keeping interest rates on hold this week, the central bank has over the past two days undermined the government’s claim that its cost-of-living relief policies, such as $300 household energy bill subsidies, are helping to get inflation back towards the RBA’s target range.