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The Reserve Bank governor says the Monetary Policy Committee spent considerable time discussing the possibility of hiking the Official Cash Rate. \xa0

It has again held the Official Cash Rate at 5.5%, where it's been for a year. \xa0

Inflation has fallen to 4%, but is still above the target of a 1-3% band. \xa0

Adrian Orr told Mike Hosking that the talk about hiking the OCR is real. \xa0

"The disappointing part is how stubborn domestic inflation remains.

"We don't determine productivity we just deal with the product we've got."

Orr said "inflation for large parts of the economy has fallen" but we are now at the "stubborn tail, which is not surprising."

Hosking said councils are crazy and out of control, and Orr said he wouldn't comment on councils.

"The biggest risk we run is not getting inflation low and stable," Orr said.

"We have to use the tools we have... we run monetary policy, we don't run councils."

Hosking said Orr has "hit the end of the road," saying that there\u2019s little more the Reserve Bank can do except completely stuff the economy by raising rates.\xa0

Orr\u2019s response was: "that is a statement."\xa0

He told Hosking that they\u2019re very confident we\u2019ll be in very low and stable inflation at 2%.\xa0

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