Australia suffering under Labor, page-807

Chilling warning over Albo's cost of livingmeasures

• Inflation surged by 4 per cent in May
• Experts fear August interest rate hike
• Albo's cost of living measures blamed
• READ MORE: Bad news for borrowers as inflation surges

Anthony Albanese's economic balancing act looks set to take a tumble as top economists warn a spike in inflation could prompt another interest rate hike - the 14th in two years.

Inflation jumped to four per cent in the year to May, up from 3.6 percent the month before, prompting NAB analysts to warn that any rate cut could be delayed until after May next year.

A cocktail of rising energy bills, higher petrol prices and skyrocketing rents have helped push the consumer price growth to a six-month high - well above the Reserve Bank's 2 to 3 per cent target.

Analysts from UBS and Deutsche Bank have now joined Judo Bank chiefeconomist Warren Hogan to predict a 14th rate hike in August, accordingto The Australian.

The prediction could be a crushing blow to embattled mortgage holderswho have weathered 13 rate hikes between May 2022 and November 2023.

Anthony Albanese'seconomic balancing act looks set to take a tumble as top economists warn aspike in inflation could prompt another rate hike© Provided by Daily Mail

NAB analysts havewarned that any interest rate cut could be delayed until after May next year inan attempt to keep inflation down. Pictured is a shopper at Coles© Providedby Daily Mail

The prime minister is expected to talk up his government's cost ofliving measures and economic management record in parliament on Thursdaymorning.

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But some economists warn that Mr Albanese's cost of living measuresrun the risk of keeping inflation high and therefore hurting battling Aussiesin the pocket.

'Governments are throwing a lot of money at the symptoms of thecost-of-living crisis, but that worsens the cause of it. And the cause is toomany dollars chasing too little stuff,' independent economist ChrisRichardson told the publication.

'Governments have abandoned the field in the inflation fight. We arefighting the inflation fight one-handed.'

In news that will stir anger in the hearts of struggling households, MrRichardson warned that 'mortgage relief is a very, very long way away'.

EY chief economist Cherelle Murphy also said another rate hike was now astrong possibility when the RBA meets again in August.

'The monthly consumer price index has jolted financial markets, whichare now once again seriously considering the possibility of another rate hikefrom the Reserve Bank at its next meeting,' she said.

The bad news was delivered only a week after RBA Governor MicheleBullock confirmed a rate rise was more likely than a rate cut, withthe cash rate this month left on hold at a 12-year high of 4.35 per cent.

'Yes, the board did discuss the case for increasing interest rates atthis meeting,' she told reporters.

'No, the case for a cut was not considered.'

Despite fears that Labor's cost of living policies, such as the $300energy bill rebate and the stage three tax cuts, are helping to drive upinflation, Mr Albanese is set to spruik that 'inflation is down' in parliamenton Thursday.

In a speech to a CEDA conference, he will boast that his policies havebeen introduced 'so that it takes pressure off people, without putting pressureon inflation'.

'Inflation is down. Annual real wages growth is back,' Mr Albanese willsay.

'Unemployment remains at near 50-year lows. And the gender pay gap is ata record low. My colleagues and I are proud of this record.'

The monthly measure of inflation is now back at the highest level sinceNovember 2023, when the Reserve Bank last raised interest rates.

But Treasurer Jim Chalmers said the monthly consumer price index wasvolatile and therefore less reliable than the quarterly inflation measure.

'As we've said many times before the monthly CPI number is volatile andcan jump around because not every item in the basket is updated each month,' hesaid on Wednesday.

'Today's annual number was dragged higher by fuel prices and the impactof base effects, which are the result of a large fall in month-to-monthinflation in May 2023 impacting the annual May 2024 number.'

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