Inflation

The annual CPI rate rise to 5.1% was higher than expectations and reflects higher fuel and food costs, sparking fears of an interest rate rise.

“Pegging the first rate hike in the cycle to a high CPI outcome is best from a public presentation perspective,” David Bassanese, an economist with Betashares, said. The pace of food price increases, including 4.3% year-on-year, is the most since 2011, Rabobank said. As anticipated, fuel, food and material costs were among the items posting big increases in the first quarter of 2022. The prime minister, Scott Morrison, and the treasurer, Josh Frydenberg, highlighted other nations’ higher inflation. “International trade bottlenecks are producing supply constraints on a scale not seen in almost 50 years,” McKellar said. The so-called trimmed mean inflation, which strips out volatile changes and is used by the central bank to set rates, rose 3.7%, or the most since March 2009. Those nations with a higher inflation rate, though, have already started lifting interest rates with more to come. A weekly survey of consumer sentiment by ANZ and Roy Morgan out today showed confidence had stalled after rising for three weeks following the 29 March federal budget. Two more ABS releases of note are scheduled before the 21 May election. “To not do so risks the RBA losing credibility.” The federal government’s 22.1 cents cut in the fuel excise will take some of the sting out of petrol prices during the June quarter, and much of the September one. “This reflected the broad-based nature of price rises, as the impacts of supply disruptions, rising shipping costs and other global and domestic inflationary factors flowed through the economy,” she said.

Consumer prices jump by the most since the GST was introduced, with the cost of living up 5.1 per cent over the past year, prompting increasing speculation ...

Critically, the Reserve Bank's preferred measure of inflation, which strips out the most extreme price moves, came in at 3.7 per cent, which is well above its 2-3 per cent target and adds to pressure for interest rates to start rising as soon as next week. The last time inflation was this high was in June 2001, when prices rose 6.1 per cent largely from the effect of the recently introduced 10 per cent Goods and Services Tax. - The RBA's preferred measure of inflation is 3.7 per cent, well above the top of its 2-3 per cent target

The Australian Bureau of Statistics on Wednesday announced its quarterly Consumer Price Index (CPI) figures. Watch the latest News on Channel 7 or stream for ...

“The grocery component of the group, which excludes meals out and takeaway foods, rose 4.0 per cent in the March quarter.” The main contributor to the rise was a 6.6 per cent jump in the price of vegetables, waters, soft drinks and juices up by 5.6 per cent, fruit up by 4.9 per cent and beef up 7.6 per cent. “The rise for the food group was softened by voucher programs in Sydney and Melbourne, which reduced out-of-pocket costs for meals out and takeaway foods,” she said. Underlying inflation - which smooths out volatile price swings and is more crucial to the interest rate outlook - jumped 1.4 per cent to 3.7 per cent for the year. The rate of the rise could force the Reserve Bank of Australia’s hand in hiking the cash rate from its record low of 0.1 per cent. Its headline figure, the annual inflation rate, jumped to 5.1 per cent after a 2.1 per cent quarter.

The RBA's inflation target range to lift rates is 2 to 3 per cent. According to the Australian Bureau of Statistics, automotive fuel prices over the quarter ...

The annual rate of inflation has soared to its highest level since 2001, fuelled by rising petrol prices...

Inflation has hit its highest level since the introduction of the GST, with the market to now eagerly watch for how the Reserve Bank manoeuvres the cash ...

Annual price growth for new houses had continued to shoot up from the June quarter last year, when it had been 1 per cent. In the previous quarter, the trimmed mean came to 2.6 per cent. The largest rise was observed in Adelaide (up 12.6 per cent), followed by Darwin (up 12 per cent) and Brisbane (up 11.9 per cent). The largest rises in newly constructed home prices were recorded in Perth (up 15.8 per cent), followed by Brisbane (+6 per cent) and Melbourne (+4.7 per cent). Looking at one of the larger drivers for the inflation surge, new dwelling prices for purchases by owner-occupiers were up by 13.7 per cent during the year to March– the largest rise since September 2000, following the introduction of the GST. New data from the Australian Bureau of Statistics (ABS) has revealed the Consumer Price Index (CPI) rose by 2.1 per cent over the March quarter.

Australian consumer prices surged at the fastest annual pace in two decades last quarter as petrol, home building and food costs all climbed, ...

"We now expect the RBA to hike by 15 basis points next week. Register now for FREE unlimited access to Reuters.com A cash rate target of 0.1% is inappropriate against this backdrop." Register now for FREE unlimited access to Reuters.com Register now for FREE unlimited access to Reuters.com

The Australian Bureau of Statistics said the consumer price index for the March quarter surged 2.1 per cent for an annual inflation rate of 5.1 per cent, up ...

The outsized increase, together with a larger than normal increase in the months to December, pushed Australia's annual inflation rate way above the Reserve ...

The response of the Reserve Bank to higher prices is not as automatic as often supposed. But, unusually, the current target is 0.10%. So it might first move 15 points to 0.25%. Households have more debt, meaning that a rate increase of any given size has more impact than it once would have. Looking ahead, inflation is likely to drop in the June quarter. If the wages data show no acceleration, it might be later. Some supply chain problems and skilled labour shortages caused by the pandemic are likely to ease. People tend not to notice the many other prices, including rents in some parts of Australia, that have been falling. In part this is because people tend to notice the prices that have jumped. Many people don’t believe the official inflation figures. Petrol prices rose to a record high. Fresh food prices have increased due to floods. The trimmed mean excludes the 15% of prices that climbed the most in the quarter and the 15% of prices that climbed the least or fell.

The Australian Bureau of Statistics said the consumer price index for the March quarter surged 2.1 per cent for an annual inflation rate of 5.1 per cent, up ...

The share market is screaming a message right now: the economy is not OK. And the ramifications will hit all of us, writes David Taylor.

What economists would like to see now, as the government steps back from its massive pandemic stimulus program, is that business and consumers take a greater share of the burden in terms of pushing economic growth along. Higher business costs are now well and truly being passed onto consumers, and as shoppers spend their pandemic buffers, demand-pull inflation is also beginning to lift. We also now have an inflation break-out. The inflation "genie" is out of the bottle. "The blow out in inflation suggests Australia is now starting to face the same risks as in various other countries, ie that inflation expectations will get out of control locking in higher than target inflation and making it even harder to get inflation back down again," AMP chief economist Shane Oliver says. Let's get real for a moment: the pandemic is alive and well and there's the real prospect China's economy will be hit again, which is negative for Australia's resources sector and of course the budget bottom line, which is already in a structural deficit. For a borrower on a variable rate with $500,000 owing, their monthly repayments could rise by $513 by May 2023, if the cash rate gets to 2 per cent as predicted. This forecast sees the RBA hiking the cash rate by 0.40 per cent in June and hitting 2 per cent by May next year. Fast forward to now and the inflation rate — as measured by the March quarter CPI — has jumped higher to be over 5 per cent (without a material lift in wages). On numerous occasions over the past two years the RBA has insisted it needs to see underlying inflation sustained in the target band of between 2 and 3 per cent to warrant an increase to the cash rate target. "The market is flagging risks from a slowing Chinese economy due to COVID lockdowns and of course the inflation risk leading to central bank interest rate tightening," share market analyst Henry Jennings says. What the rise in inflation means for interest rates and cost of living — and it's not good newsBy

Data released today by the Australian Bureau of Statistics shows headline inflation rose to 5.1% over the last 12 months, increasing the likelihood of a ...

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Inflationary pressures will add further stress to the Reserve Bank's timeline to hike the cash rate, with a number of economists believing the central bank ...

Food prices have had their highest year-on-year inflation price rise in 11 years. The latest consumer price index data from the Australian Bureau of Statistics ...

Critics say businesses use inflation as an excuse for price gouging, or raising prices by far more than required to cover higher costs.

When there is excess demand, prices rise and those selling the product receive higher revenue as a result. And in a March 2 earnings call, Hostess CEO Andy Callahan explained the company's price hikes by saying, “Consumers get used to it. The wholesale index includes raw materials and intermediate goods, she says. Faulkender also notes that wholesale costs have risen more rapidly than retail prices, underscoring that businesses haven’t passed all their increased expenses to consumers. Consumer demand was turbocharged by federal stimulus payments at the same time that global supply kinks created product shortages, he says. Oil prices, however, are determined by a global market and producers typically pass them along to refiners. Exhibit A in progressives’ case for price gouging is the current earnings season. So there's a relative pricing thing that I think every food business has experienced.” Since the 1980s, two-thirds of U.S. industries have become more concentrated, he said. And they can because they don’t face meaningful competition.” That could change. Thirty-eight states do prohibit raising prices excessively during disasters or emergencies.

The war in Ukraine will quicken inflation, which we now expect to remain elevated for longer than previously forecast on higher commodity costs and broader ...

This would further intensify and broaden inflation pressures, with the risk of de-anchoring inflation expectations. Moreover, both the war and renewed pandemic flare-ups could prolong supply disruptions, further increasing costs of intermediate inputs. Worsening supply-demand imbalances, including from the war, and further commodity-price gains could keep the pace of inflation persistently high. We assume labor supply will gradually improve this year as the health crisis abates, but the effects will be moderate and unlikely to significantly ease upward wage pressure. Demand should soften this year as policy support is withdrawn and supply bottlenecks ease, but China’s recurrent lockdowns, war in Ukraine, and sanctions on Russia will likely prolong disruptions in some sectors into next year. Energy and food helped boost inflation last year, with oil and gas supplies tight after years of subdued investment and geopolitical uncertainty.

Home owners could be slugged with higher mortgage rates as early as next month after annual inflation rose to the highest rate in two decades.

“While new dwelling construction costs and petrol are the biggest causes, they don’t even account for half of the headline inflation number,” he said. “The government does shoulder some of the blame for pumped-up dwelling construction costs,” Mr Eslake said. “This is a triple whammy of skyrocketing costs of living, rising interest rates and falling real wages,” he said. Economist Saul Eslake said the March inflation figure is a “shocker” that will prompt a May hike. That is far above the RBA’s official target band of between 2 and 3 per cent for underlying annual price growth – and why Mr Pickering said “a May rate hike is almost guaranteed”. Mr Pickering said the inflation genie is now “well and truly out of the bottle”, with even underlying inflation, which strips out volatility, rising 3.7 per cent year on year.

The last time interest rates rose during an election campaign was in 2007. Inflation had hit 3 per cent and the Reserve Bank was worried it might climb ...

Instead, they're both relying on economic growth to close the structural deficit slowly and painlessly, at some point in the very distant future. Interest payments are already forecast to hit $22 billion a year by 2025-26, a figure which could rise if rates climb faster and higher than expected. In reality, a $5 billion improvement is small beer when accumulated deficits of almost $225 billion are forecast over the next four years. Wednesday's inflation data was a shock to both the government and the Reserve Bank. They were expecting a figure with a 4 in front of it. He acknowledged the pressure facing Australian families, reminded them of the cost-of-living hand-outs announced in the budget and pleaded with them to look overseas where the problem is far worse. The government's best hope is to convince voters to stick with what they know in uncertain times — managing the economy is complicated, now's not the time to risk change. Labor has promised a "waste audit" of government spending should it win on May 21, but it's unwilling to identify any specific cut before the election. That doesn't appear to be working, however, on the Coalition's other favoured ground — national security. Labor is already warming up for the looming RBA decision. It's no longer simply a question of whether rates will rise. Even at 5.1 per cent, Morrison is correct about inflation being worse elsewhere. The 5.1 per cent result was another blow to the Coalition campaign.

Financial markets now believe the RBA will lift the official cash rate next week after inflation rose in March - its biggest increase since 2000.

But financial markets now believe the bank will have to use its May 3 meeting to deliver the first increase in the official cash rate since November 2010. The available fig leaves to hide behind are getting smaller,” he said. In the December quarter, it was 35 per cent. Financial markets now believe the RBA will take the official cash rate, currently at a record low of 0.1 per cent, to 0.25 per cent at next Tuesday’s meeting. To not do so risks the RBA losing credibility,” she said. Among discretionary items, inflation is running at a much more moderate 2.7 per cent.

Record inflation and cost-of-living pressures continue to dominate the campaign trail, as the major parties take their election pitches to Sydney and Cairns ...

But, nearing the halfway mark of this campaign, there's been little movement in the polls, writes David Speers. Here's how the payment works. We need some short-term relief. "We need a plan. what is the plan to deal with it going forward?" "Our criticism is... "I mean, that is the solution. Here's what we found By Jessica Riga "Well I'm looking forward to him rejoining the campaign, he's had a very quiet week. By Jessica Riga By Jessica Riga

The first week of the campaign was dominated by two numbers: 4% and 0.1%, the unemployment and cash rate figures Anthony Albanese couldn't remember.

“That’s always a decision for the Reserve Bank,” Morrison said when reminded of that history by a journo. The RBA usually doesn’t raise rates in the midst of an election campaign, but did so last in 2007 – and we know how that election turned out for John Howard. Morrison started the day in Rockhampton with a coffee with seniors, a speech to the Capricornia Chamber of Commerce, and a press conference where he publicly slapped down Nationals senator Matt Canavan over net zero. Karen Andrews: The home affairs minister has suggested the “timing” of the Solomon Islands-China security pact is suspect, insinuating the announcement was made to coincide with Australia’s election. Labor’s shadow childhood education minister, Amanda Rishworth, joined Jason Clare, Sally Sitou, a phalanx of media and a bunch of kids at a childcare centre in Strathfield today. Anthony Albanese will be keen to get out of Covid isolation tomorrow night, and prosecute that argument on the road himself. Inflation: A political hand grenade lobbed into the campaign environment at 11.30am, with figures showing inflation jumped by 5.1% in the last year. Jason Clare and Amanda Rishworth campaigning in Sydney with candidate for Reid (Coalition-held, 3.2%), Sally Sitou, who Labor thinks has a good chance of winning. The first week of the campaign was dominated by two numbers: 4% and 0.1%, the unemployment and cash rate figures Anthony Albanese couldn’t remember. Labor’s media plane went to Canberra, where Jim Chalmers and Katy Gallagher unveiled the party’s long-awaited policy on multinational tax. Both parties are campaigning hard on cost of living, and Labor particularly gunning hard on claims that wages aren’t growing fast enough. Today’s bombshell economic figure adds fuel to that fire, with prices of basic goods growing way faster than your paycheque has been.

The Grattan Institute says Labor's climate plan would have little financial impact on coal as the prime minister accuses the opposition of wanting to ...

The best way to make wages rise is to make sure that there is full employment and that there is pressure, then, on employers to attract and retain staff. This is the legacy of Scott Morrison’s economic mismanagement. The gap between the cost of living and wages continues to grow. Even in times of great global uncertainty, even in times of global pressures on costs of living. The commitment to net zero by 2050 was a commitment that was taken to the party room, a proposal taken to the party room. Former Liberal prime minister John Howard lost that election and his own seat. But it’s still tough. It was agreed by the party room. One of the great things about Albo is his leadership style is to build a team and lead a team. In Ryan’s case, she was briefly a member of the Labor Party around the time Kevin Rudd became prime minister. In his absence, we have done our best. By Broede Carmody

Inflation jumped in March, sparking expectations of a cash rate rise before the election, and concerns for mortgage holders.

For those on an average mortgage of $600,000, adding three percentage points to the borrowing costs could swell repayments by $1,500 a month or more. That tally, though, was an average and a lot people wouldn’t enjoy so large a buffer, Tindall said. Inflation data for the March quarter, released by the Australian Bureau of Statistics on Wednesday, underscored the rising cost of housing. Those outer suburbs, mostly held by Labor, often include higher ratios of first-home buyers, some lured by government schemes during the Covid crisis. Those borrowers who lately had a change of circumstances – such as an added child to the family, a change of job or a business snarled by Covid – may struggle to make higher repayments. “It’s not strictly speaking mortgage stress,” Prof Hal Pawson from UNSW said.

With inflation soaring to a 21-year high, a pre-election hike in interest rates could now well be on the ca...

"They are going to increase interest rates, they are going to do it. We are in the middle of a global pandemic, with a war in Europe. I think Australians understand that." "Now, we are seeing inflation rise faster than people expected, and that means the Reserve Bank are going to have to pull on the brake probably harder and faster than they expected." Today, it is 0.1 percent," Mr Morrison said. They are very different situations.

Official figures released this week showed the biggest jump in prices in 22 years, with inflation rising by 5.1 per cent in the March quarter.

“The fuel excise reduction is expected to reduce headline inflation by ¼ of a percentage point in the June quarter of 2022,” the budget papers state. The figure cited in the budget is half that amount. “We are in the middle of a pandemic with a war in Europe. Those situations were not in place in 2007,” he said. Pressure is now on the RBA to increase interest rates from the emergency-low level of 0.1 per cent next week, instead of waiting for wages data later in the month and moving in June. “If the prime minister wants to take credit for things that go well in the economy, he needs to take responsibility for the fact that Australians are getting absolutely slaughtered by this triple whammy,” he said at a press conference in Sydney on Thursday. “If anything, I think what we’ve seen in the last 24 hours underscores the point that I’m making: we are not out of the woods yet.”

Workers' ability to buy things with their wages is little different from when Tony Abbott took office in September 2013.

That truly destroys any sense that there has been some glorious recovery out of the pandemic. Graph not displaying? Graph not displaying? Graph not displaying? Graph not displaying? Graph not displaying?

Supermarket giant Coles says the cost of living will continue to rise as inflationary pressures started to mount across the March quarter, forcing it to ...

“But we’ve got plenty in the pipeline and arriving this week.” The “vast majority” of these requests had been made by suppliers for the very first time, Cain said. Coles said its sales were elevated through January as the Omicron wave affected shopper habits.