A top Australian central banker on Tuesday warned that climate change was likely to lead to greater volatility in inflation while making it harder to judge the right setting for interest rates, adding extra uncertainty to future policy.
“These concepts are difficult enough to assess in real time in the normal course, let alone when climate change is introducing additional variability and uncertainty,” Bullock said in a speech in Canberra. During the Q&A session, Bullock, who is due to become governor in mid-September, said interest rates may need to rise again as inflation is still too high, but policymakers would be data-dependent, largely repeating recent guidance from the bank.
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