Outgoing Reserve Bank governor Philip Lowe is set to face his final interrogation in parliament, amid expectations the central bank’s rate hiking campaign may be over.

Dr Lowe, incoming governor Michele Bullock, and other senior executives from the central bank are set to front the House of Representatives economics committee on Friday, before he steps down as the bank’s head in mid September.

Speaking on Thursday before the committee meeting on Friday, members said they would ask governor Lowe to reflect on his seven-year tenure leading the key economic institution, and his role in leading the bank through the current inflation breakout.

As the bank dealt households 12 rate hikes since May last year, Dr Lowe has faced growing media and political scrutiny with the bank coming under mounting pressure to halt its push to crush price pressures.

Labor MPs said they would ask Dr Lowe and Ms Bullock about the uneven effect that RBA rate hikes have had across the economy.

Data released by the Commonwealth Bank earlier this week showed the effects of the bank’s rate hikes as it tried to contain surging inflation were hitting some parts of the population harder than others.

Figures showed younger Australians had been dealt a disproportionate blow by rising interest rates, while older Australians had seen their savings increase.

Independent MP Allegra Spender said she would quiz the RBA leadership on its near-term outlook and why it had pursued its current strategy, rather than engineering a more gradual economic slowdown while tolerating higher inflation.

Ms Spender is also expected to ask about weak business investment and its effect on Australia’s lagging productivity.

Separately, Coalition committee members are expected to ask about how households will manage the lagged impact of rate hikes as they pass through the economy.

Coalition MPs are additionally expected to raise concerns about the faltering economic growth. The bank’s latest statement on monetary policy, released last Friday, showed GDP growth was forecast to rise by just 0.9 per cent in 2023.

Committee members speculated that the Reserve Bank governor could inflict one final rate hike before his tenure ends on September 17.

This would give incoming governor Michele Bullock clear breathing space, they said, and increase the likelihood that when the bank moves next, it will be to cut rates.

With property and rental prices showing no signs of slowing, Coalition and Labor MPs are also expected to ask questions about the housing market.

“The RBA’s decisions to pause interest rates in July and this month were welcome news to mortgage holders and renters,” committee chair Daniel Mulino said before the meeting.

“Although inflation is declining, it remains a key challenge to Australia’s economy and household budgets are still feeling the pressure.”

“The committee takes its scrutiny of the RBA seriously and will continue to examine how the challenges of tackling high inflation are evolving – especially in light of the RBA’s mandate of returning inflation to the 2 to 3 per cent range over time.”

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By Rahul

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