WEBVTT -  Reserve Bank admits they got it wrong 

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<v Speaker 1>Today's biggest news from The Australian. I'm Claire Harvey with

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<v Speaker 1>the Front's afternoon headlines. The Reserve Bank of Australia has

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<v Speaker 1>put the cash rate up for the first time in

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<v Speaker 1>two years. Mortgage rates will now rise as one lender

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<v Speaker 1>after another follow suit. The cash rate determines how much

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<v Speaker 1>it costs banks to borrow money the money they lend

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<v Speaker 1>us to buy homes. A rise in the cash rate

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<v Speaker 1>inevitably means lenders jack up their home loan rates. It's

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<v Speaker 1>a unanimous decision by the Monetary Policy Board of the

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<v Speaker 1>Reserve Bank, and it's being interpreted by economists as a

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<v Speaker 1>major blow to Labour's economic agenda as it prepares for

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<v Speaker 1>a budget in May. The Bank said in its decision

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<v Speaker 1>that it had underestimated the heat in the economy and

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<v Speaker 1>although inflation has fallen steadily since twenty twenty two, it

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<v Speaker 1>is picked up materially in the second half of twenty

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<v Speaker 1>twenty five. The Bank said it judges that some of

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<v Speaker 1>the increase in inflation reflects grade at capacity pressures. That is,

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<v Speaker 1>higher household consumption, government spending and business investment is driving

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<v Speaker 1>up the prices of materials and goods that power, construction

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<v Speaker 1>and the materials we all consume. The Bank is also

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<v Speaker 1>concerned headline inflation is going to keep rising, a significant

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<v Speaker 1>lift on its previous forecast to four point two percent

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<v Speaker 1>by June before falling to three point six percent in December.

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<v Speaker 1>That's well outside the Bank's target range, where inflation should

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<v Speaker 1>be between two and three percent. You can read all

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<v Speaker 1>our analysis right now at the Australian dot com dot

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<v Speaker 1>au and come back to the front first thing in

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<v Speaker 1>the morning for another bombshell twist in the Brittany Higgins saga.

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<v Speaker 1>Former staff for Fiona Reynolds is suing the Commonwealth and

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<v Speaker 1>says she was frightened and intimidated by Scott Morrison's actions

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<v Speaker 1>after Higgins made her allegation of rape. She also says

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<v Speaker 1>she was frozen out by Morrison's office and left in despair.

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<v Speaker 1>See you back here first thing Wednesday.