The coming federal election is sure to have plenty of drama but it could face a new complication in a few weeks in the form of an increase in mortgage interest rates right in the middle of the campaign.

That has become a real possibility this week after the Reserve Bank of Australia sent some clear signals that it had brought forward its schedule for lifting official rates from the emergency level 0.1 per cent where they have sat since November 2020.

RBA governor Philip Lowe previously said he would be “patient” in raising rates back to normal because he wanted the economy to recover from the pandemic. But he dropped the word “patient” from his statement after the monthly board meeting on Tuesday.

Instead, the RBA is worried about a tide of inflation sweeping the world as a result of the rise in petrol prices, COVID-related supply chain blockages and the excessive pandemic fiscal stimulus that is being spent now lockdowns are over.

Newly appointed deputy governor Michele Bullock drove the point home at a Senate estimates hearing. She said the RBA sees “underlying inflation pressure” in the economy.

Until a few months ago the RBA was still saying it did not expect to lift rates until 2024. But now most economists expect it to lift rates in June and it could come as early as the next RBA board meeting on May 3.

Much will depend on data due at the end of April which will show whether inflation is climbing from the already high annual rate of 3.5 per cent in 2021. That is already outside the RBA’s target range of 2 to 3 per cent.

Some say the RBA has already waited too long, noting that the US Federal Reserve has just lifted rates.

If this is true and the RBA has to raise rates quickly to correct its mistake, they say, it will hurt people with mortgages and reduce house prices, potentially putting some people who bought over the past six months into negative equity.

The debate about RBA policy is important and adds to the case for a wide-ranging review of the central bank, including its approach to setting interest rates. Both sides of politics have backed a review although they disagree on its exact terms of reference. The Herald also strongly supports a review.