Who’d want the job of bank governor Michele Bullock right now? If rates were hiked in August, Bullock would take a heap of flak. But, unlike the government, she doesn’t face an election. Critics, especially the opposition, would accuse the government of fuelling inflation with its budget cost-of-living measures, although Treasury has estimated they reduce inflation.
The Westpac forecast for the June quarter is an annual rate of 3.8%. Inflation is being fed by rises in petrol prices, insurance and rents.
This week the markets’ expectation of an August rate rise is still relatively low. So for the government, there is an encouraging chance of dodging the bullet – and the ire of home buyers.
https://theconversation.com/grattan-on-friday-eyes-are-on-sundays-reshuffle-but-governments-fears-are-about-wednesdays-inflation-number-235506
as always Grattan has the best and most balanced views on politics.
inflation is the killer while cost of living is all talk.
ease cost of living pressures and you fire up inflation. address inflation with austerity and you get worsening cost of living pressures.
so where is the balance, the fulcrum, the sweet spot for managing the global inflation and the local consequences of insurance premiums rising due to global warming, landlords rental rates, due to short term accommodation, people moving out of shared rentals, insurance costs, falling housing supply etc., and pressure from businesses goin g into liquidation, due to rising import and operational costs.
wages pressure also builds into inflation. the Govt has been careful not to over stimulate the economy by asking FairWork Comm for higher pay rises, despite pressure from both unions and opposition.
interestingly if the opposition had their way demanding easing of cost of living, inflation would be forced higher.
