THE SQUIZ
As anticipated, the Reserve Bank lifted the official cash rate by 0.25% to 3.1% yesterday, marking the 8th raise in a row and taking it to the highest level in a decade. It means those with a $500,000 mortgage are now paying an extra $834 a month compared to May. Treasurer Jim Chalmers yesterday acknowledged rate rises have “harsh and heavy” consequences for Aussies, adding that the “full impact” won’t be felt until later. He also noted that Oz is “hostage” to international factors that are keeping inflation high, including the war in Ukraine and the ongoing COVID lockdowns in China.

HOW HIGH CAN IT GO?
We won’t know that answer until next year. The big banks are already hazarding a guess – Westpac and ANZ predict a peak of 3.85% in May. But how our economy is tracking is an important factor, and we’ll know more when the latest data is released by the Bureau of Stats today. Meanwhile, we found out yesterday that while we’re spending 20% more than at this time last year, that eased up a bit in October, suggesting cost of living pressures are squeezing us right in the hip pocket. And there’s no escaping it – even eating at home is expensive with food prices growing at the fastest rate in 16 years. Christmas spoiler alert: fruit and vegetable prices are set to peak in mid-December.

AND WHAT ABOUT ELECTRICITY PRICES?
That’s TBD… Despite PM Anthony Albanese’s latest bout with COVID, he insists power bill relief will be determined before Christmas and kick in by February. The details will be thrashed out at a postponed/virtual National Cabinet meeting on Friday. Team Albanese wants the states/territories to cap wholesale coal and gas prices to bring electricity prices down. That’s proving a bit unpopular so far – NSW and Queensland are leading the calls for compensation in place of lost royalties worth billions and reports this morning say Treasurer Jim Chalmers is considering that demand. Several premiers have also complained that they don’t know the details of what will be discussed on Friday, but Albanese insists the bureaucrats have been working it through in a “whole lot of detail”. The more things change, the more they stay the same…