Australia was the first Group of 20 nation to press the pause button on the cycle of interest rate cuts, back in March. So it was perhaps fitting that its central bank should also be the first to tighten, lifting the target cash rate to 3.25 per cent on Tuesday.

Even so, this was a shocker, predicted by just one of 20 economists on Bloomberg’s speed-dial. Consumer price inflation, at 1.5 per cent, is less than half the 20-year average. Unemployment is at a six-year high, and still climbing. Other data has been encouraging, but as Reserve Bank governor Glenn Stevens seemed to concede on Tuesday, it is hard to disentangle genuine recovery from artificial, government-created demand: Australia’s discretionary fiscal stimulus this year was the largest among developed-economy peers, as a percentage of gross domestic product. The currency, at its highest level in 13 months before the rise, did not need the extra fillip of 25 basis points of yield. The RBA has never been a compulsive fiddler – it held rates steady for 16 months earlier this decade.