“Members agreed to reconsider the case for a pause at the following meeting, recognising that pausing would allow additional time to reassess the outlook for the economy,” the minutes from the 7 March meeting said.

“The considerations meant it would be appropriate at some point to hold the cash rate steady to assess more fully the effect of interest rate increases to date.”

In its latest Global Economic Forecasts: Q1 2023 report, Euromonitor International has forecast that global growth is expected to drop from 3.3 per cent in 2022 to 2.3 per cent in 2023 and although inflation is expected to decline at 6.8 per cent, it will remain significantly above the long-term trend.

The report said the global economic outlook for 2023 is among the weakest in decades as the economic fallout from the Ukraine conflict will weigh heavily on growth as demand is dampened by persistent inflation and the increasing impact of rising borrowing costs for businesses and consumers.

Although global inflation peaked at the end of 2022, the report states ongoing supply chain constraints, diverging monetary policies and tight labour markets are adding pressure to the global outlook.

However, there was a glimmer of optimism with the prediction that this year most of the key drivers of inflation will continue to abate.

Commodity prices are expected to ease further with rapidly rising interest rates weighing heavily on demand and global inflation is expected to remain higher for longer, driven by labour shortages in advanced economies and persistent commodity price pressures in developing markets.

The report said that before inflation slows to 4.4 per cent in 2024, most countries are likely to see price increases spread more broadly throughout their economies.

While central banks have rapidly increased interest rates with the aim to slow economic activity and lower inflation, there remains a potential of over-tightening monetary conditions which could result in a global recession including severe debt distress globally.

In the global stagflation scenario, the economy comes under significant pressure as key growth risks materialise. Consequently, global real GDP is expected to decline by 0.8 per cent in 2023, followed by a subpar recovery of 1.2 per cent in 2024.

The primary risk driving the global stagflation scenario in 2023 is further disruption to global energy and food supply which would ignite a resurgence of global inflation, increasing the likelihood of more persistent price pressures in the global economy.