the cost of living and the new high prices do not signify entrenched inflation. Like you said, your wage hasn't gone up, and nor has mine. If the price increases are the result of too much demand, covid and Ukraine related supply chain issues, floods and the price of oil and gas, then these things are all transitory. it's when wages follow that there is a risk of entrenched inflation, and this is not overly evident in Australia at the moment.
Taking your block of cheese example: $8.50 in Dec, $10.50 in Feb. If it stays at $10.50, although expensive, then inflation is 0% If it continues to go up $12.75, $15.15, $18, and so on, that's an inflation problem. It's highly unlikely that this will occur. Instead we have higher prices, some will come back, some never will, but to think they'll continue to increase at 7% pa is wrong in my opinion ... especially with rate increases denting retail spending already
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$20.25 Sentiment: None Disclosure: Held
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