The Reserve Bank of Australia has given the first strong indication it will change its economic forecast when it makes an interest rate decision next Tuesday, according to Sky News Business Editor Ross Greenwood.

When giving evidence before a Senate committee on Thursday, the RBA’s Deputy Governor Guy Debelle indicated there could be a review of the economic forecast, and this could be a litmus test of whether the central bank will keep with interest rates as low as possible until 2023.

Mr Debelle noted inflation is “increasing, it has increased” – with the idea being “a little bit more inflation is welcome, a lot more inflation is not welcome”.

“The monetary policy settings we have in place, as do other central banks around the world are, we are looking to generate a little higher inflation than we have over the last five, six years,” Mr Debelle said.

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