Perspective with Heather du Plessis-Allan: Here's hoping this Reserve Bank Governor does a better job

We’ve had the first monetary policy decision from the new Reserve Bank Governor, and it’s not until you get a new captain at the helm that you realise just how little confidence you had left in the previous one.

Now, to be fair, it’s early days for Anna Breman. We’ll judge her by what she does from here on in. But she does start with a clean slate - without us reading too much into her decisions or second-guessing every move because of a poor track record. 

And that, I’d say, is a very welcome change from just a few weeks ago before she took over.

Her assessment is that inflation is fine. Yes, it’s a little high right now - 3.1 percent, outside the target band - but it’s expected to fall back within the band by this time next year. 

The economy is improving. The green shoots that were previously limited to certain regions and industries are becoming more widespread. Households are getting more money in their pockets, but they’re still cautious - and that’s a problem.

Because unless they’re confident enough to spend, they’ll hold back the economic recovery from what it could potentially be.

But - and this is probably the bit you’ve been most interested in, and waiting for - they will start raising the OCR faster than expected.

Previously, the Official Cash Rate projection had it going from 2.2 percent in March to 2.3 percent in December. That’s now been brought forward: they’re forecasting 2.3 percent in June and 2.4 percent in December.

The first increase will still most likely be in December, but the chances of it happening in September just increased.

It’s not a major concern. It’s not a major correction. It’s not a game-changer for most people. But it does bring the inevitable a little closer.

Still - for now - it’s nice to have a change at the top, isn’t it? And here’s hoping this Governor does a better job than the last one.

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