Members commenced their discussion of the domestic economy by noting that the outlook for the economy had not changed materially over the preceding three months. Stronger growth was expected over the following couple of years, which would reduce spare capacity in the economy and lead to a further gradual decline in the unemployment rate. This, in turn, was expected to lead to a gradual pick-up in wages growth and inflation. The inflation data for the March quarter had been in line with the Bank’s expectations. Inflation had been ½ per cent in the quarter and close to 2 per cent over the year in both headline and ... (full story)