Retailers and residential builders were warned by the Reserve Bank this may push ahead with rate of interest rises no matter if it sends them to the wall.

Minutes of the RBA board’s May meeting, at which it kept official rates of interest on hold, show the bank increasingly worried about inflation getting out of hand end result of the surge in commodity prices.

While admitting a future rate rise would hurt, the bank used its meetings to mention it effectively had no wrong way to maintain a lid on inflation.

“Members noted that the numerous divergences between different sectors of the economy presented challenges for policy-making, but that monetary policy needed to be set for the wishes of the total economy,” the minutes show.

“On this respect, members judged that if economic conditions continued to conform as expected, higher rates of interest were more likely to be required someday if inflation was to stay per the medium-term target.”

The minutes suggest that the RBA will carefully consider a rate rise at every meeting for the remainder of the year.

The only saving grace could be the way households are saving as opposed to spending at the moment.

The RBA believes that because the global financial crisis households have changed their spending patterns, putting more away within the bank instead of heading to local malls.

That trend is showing up in official measures of saving and within the way retailers are struggling to entice shoppers in the course of the doors.

According to the minutes, the RBA is familiar with that if consumers continue to save lots of the pressure for a rate rise will fall.

That loss of spending, coupled with a slowing tightening jobs market, should help the Reserve steer clear of its rate of interest trigger.

“One area of uncertainty was the behaviour of the household sector and whether the hot cautiousness of households would continue,” the minutes show.

“Another uncertainty concerned the tightening of the labour market and whether a pick-up in wages within the resources sector would spill over into significant pressure on wages elsewhere within the economy.

“Members observed that the behaviour of households and the labour market could be important determinants of the end result for inflation over the following couple of years.”