The Reserve Bank’s minutes have revealed it considered another rate rise this month, before deciding to pause, but shows that further rises are forthcoming.

The RBA decided not to inflict an eleventh straight rate rise at its minute earlier this month, pausing to allow previous rate increases flow through the economy.

This is, however, a pause rather than a halt.

“In considering communication of the Board’s decision, members observed that it was important to be clear that monetary policy may need to be tightened at subsequent meetings and that the purpose of pausing at this meeting was to allow time to gather more information,” the minutes said.

Last week, Morgan Stanley analysts predicted the cash rate, currently at 3.6 per cent, will soon hit 4.1 per cent.

“The labour market is central to this assessment – the RBA flagged a desire for a soft landing to lock in some of the unemployment improvement post-Covid, but also acknowledged that some weakening is required to get inflation back to target,” Morgan Stanley’s note stated.

“Near-term we think the bar for a quick shift back to hikes is high – accelerating core inflation (with the quarterly CPI data due to be release on April 26) is likely required to bring the May meeting back into play.

“Over the coming months though, a more resilient labour market is likely to skew the RBA towards acting on its tightening bias, particularly if it is paired (as we expect) with an accelerating wage growth path (with the June minimum wage announcement an important catalyst).”