AAP has a preview of today’s inflation figures, which are going to be horrible:
Australia could be about to record its worst inflation outcome in more than 31 years, paving the way for higher mortgage and lending rates.
The Australian Bureau of Statistics will release the consumer price index data for the June quarter – when the price of a supermarket iceberg lettuce hit $10 – on Wednesday.
The financial market consensus is for a headline annual inflation rate of 6.2% – the highest since the December quarter of 1990.
That would be more than the 5.1% rate logged in the March quarter, which was the fastest pace of annual price growth in 21 years.
“Since then, inflation has likely broadened and deepened,” St George chief economist Besa Deda said.
The quarterly outcome is forecast at 1.8%, which would be slightly lower than the 2.1% recorded in the previous quarter.
But the range of economists’ forecasts for the quarterly number is wide – between 1.6% and 2.8% – signalling uncertainty about how deeply entrenched price pressures have become since March.
While the main drivers of inflation in the June quarter will again be fuel and food costs, housing and building costs are also likely to be strong – perhaps as high as 20% year-on-year, according to JP Morgan economists.
Other factors are adding to the pressure, particularly in the housing sector, where rents are rising and demand for new homes and related construction services and products remains strong.
It is the first question time today. In case you missed it, here is Murph’s analysis on the plan so far:
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