THE SQUIZ
We’ve received another set of serious with the Bureau of Stats which confirms that ​​the Consumer Price Index (CPI) – aka how we measure inflation/price increases – rose 6.1% over the 12 months to the April-June quarter. That’s 0.2% below what the market was expecting, but it takes inflation to more than double what the Reserve Bank is targeting. The price of everything in the Bureau’s basket of goods and services went up during the quarter except education, which didn’t move. What went up in price a lot over the year: new homes (+20.3%) and vehicle fuel (+32.1%). So it totally sucks if you’re driving around looking for a new place to call your own…

WHAT DOES THAT MEAN?
The last time inflation was this high was from the introduction of the GST in mid-2000 – and it’s not quite the same because that was the result of tax reform, not tricky economic times. A better comparison is from 1990 when inflation ended up at 6.9% for the year, which brought on the “recession we had to have”. Back to the here and now, analysts say inflation is on track to hit 7% by the end of this year, but price rises will be bumpy. For example, oil prices are backing off a bit, meaning petrol prices should come down, but gas and electricity prices are set to continue to rise. And with the International Monetary Fund forecasting “gloomy and uncertain” economic times globally, it’s troubling territory for policymakers and consumers alike.

I’M A BIT SCARED TO ASK, BUT WHAT’S NEXT?
More interest rate rises. The Reserve Bank board meets next Tuesday to consider its next move and the experts say get ready for a 0.5% increase taking the official cash rate to 1.85% – and there will be more where that came from. Treasurer Jim Chalmers has warned the Reserve Bank not to “overreach” by raising interest rates too aggressively. “For every dollar that people find to service their mortgages, every extra dollar, it means a dollar that can’t go to funding the skyrocketing costs of other essentials,” he said yesterday. Chalmers will be front and centre today with an update on the state of the economy, and he’s already warned us to be ready for some “confronting” news. The Coalition’s Treasury spokesman Angus Taylor says he gets there are global headwinds outside the new mob’s control, but “the challenge of government is to meet the challenges that come at you.”