"It is not having a direct influence but through a couple of channels the fact that there are a lot more people coming into the country has eased pressures and some labour markets, particularly, in the hospitality sector because a lot of the increase in population over six months has been students. They often work in hospitality sector.

"Our liaison with firms in that sector say it is easy to get workers and has taken some of the heat out of that labour market. That works in the short term to put inflation down, on the other hand, all these people coming in have to live somewhere.

"That is pushing up rents and housing prices and with your housing prices would continue to decline this year but they are not. In Sydney, the rising quite strongly again. And that is partly to the influx of immigration.

"There are pluses and minuses in terms of inflation outlook. Helping contain wages growth that [is] putting upward pressure on rates. But we talk about it and the bank, if we're going to have a lot more people the country, which is good, we need the capital stock to support those people.

"Otherwise the capital-labour ratio declines and that is bad for productivity, so population growth brings huge advantages to the contrary but we need governments and businesses to keep investing to build a capital stock to support a stronger population.

"The housing market is the clearest example of that but there are a lot of other examples as well.

"It is a broader issue than just the short-term inflation outlook it is how we build the capital stock to support a larger or diverse population which I think is in long-term interest."