"It was as expected, we think this is likely not to be the last increase as well, so what we saw in the Reserve Bank statement which they released with their decision, they said some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe," she said.

"So the RBA, I think they are getting a little bit more concerned about the upside risks to inflation, elsewhere in their statement today they did note that the upside risk of inflation have grown so what that means is, therefore cast either by mid 2025 inflation is back to normal but the risk that inflation is too high even at that point has grown compared to when they last met.

"We know this through the monthly CPI indicator that shows that inflation actually accelerated in the month of April and we also know that there is some real concerns about the cost of an hour of work and that is not necessarily because wages are going up very quickly, they are going up 3.7% year on year which is a decade high but still relatively sluggish and the grand scheme of things.

"It's the fact that productivity isn't really growing quick enough, so although the amount of money we are shelling out for an hour of work is growing, the amount of output also isn't growing and that is going to be a real concern going forward for the Reserve Bank."