Reserve in a bind on rate moves THE Reserve Bank has been backed into a corner by the latest inflation and employment figures. With its preferred underlying measures of inflation running at an annual rate of 3 per cent for the past six months, it can no longer assert, as it did after its board meeting in December, that "inflation is consistent with the medium-term target." Nor can it retain the confidence expressed then that this would remain the case over the next one or two years. The board has repeatedly stated in its minutes that it should not "close off" the possibility of reducing the cash rate further should this be required to support growth.