Every time you pull out the wallet to pay for goods or services, it just seems to cost more and more

From grocery shopping and the petrol bowser to childcare, rent and construction, prices are rising at an alarming rate

It’s the devilish problem that just won’t let up.

Every time you pull out the wallet to pay for goods or services, it just seems to cost more and more.

From grocery shopping and the petrol bowser to childcare, rent and construction, prices are rising at an alarming rate.

Even a simple takeaway coffee could soon set you back about $7.

Australians are facing rising cost of living pressures across the board, forcing many consumers to rethink family budgets and worry if they can pay all the bills.

Making matters worse, wage growth remains sluggish at best, meaning workers feel as if they are slipping farther and farther behind.

It’s a potent issue which has taken centre stage in the federal election and may very well impact the result at the polls on May 21.

AUSTRALIAN CURRENCY/ DOLLARS/ PICTURE: istock Close-up, senior female hands taking Australian banknotes (cash, currency) from purse containing many credit cards. Horizontal, studio, copy space.

Like many countries around the world, Australia is feeling the hip pocket pain largely because of rising inflation.

Last year inflation rose 3.5 per cent, its highest rate in years, with a supply chain squeeze brought on by the pandemic blamed for much of the increase.

Russia’s brutal invasion of Ukraine has also led to global disruptions which have impacted an array of goods, especially wheat and oil.

These factors, of course, have forced retailers to increase prices just to cover their higher costs.

More pain is ahead too. The Reserve Bank is widely expected to raise interest rates later this year to help control inflation, a move which will see many homeowners fork out extra on their mortgage.

Meanwhile, the average weekly wage only lifted by about 2.1 per cent so, for many workers, the feeling that they are falling behind is not an illusion.

AMP Capital chief economist Shane Oliver said the easing of Covid lockdowns and related restrictions had been a key factor in driving inflation higher.

That’s because limits on accessing services at the height of the pandemic meant consumers spent heavily on goods just as the supply and production of those goods came under pressure.

“Most countries are seeing an increase in the cost of living,” Dr Oliver said.

“Most governments are hoping the problem recedes as people go back to work and more spending rotates back to services.’’

ANZ head of economics David Plank believes inflationary pressures will peak in the first half of this year and then start to ease off.

He’s also forecasting real wages growth later in the year, which will help boost confidence among consumers already benefiting from historically low unemployment.

“In time, we think nominal wages growth will catch up with and exceed inflation,’’ he wrote in a recent research note.

“If we are right, consumer confidence should also recover. In the meantime, the unhappy state of households could dampen consumer spending somewhat, so it presents a downside risk to the near-term outlook.”

But others don’t believe the problem of higher prices will ease any time soon.

Petrol, which averaged $1.48 per litre late last year, is now routinely above $2 in many places.

Shoppers have seen beef prices soar 35 per cent since 2020, with lamb up 28 per cent in the last five years.

Rents have climbed 9 per cent over the past 12 months and about 25 per cent in the last five years.

Results of a survey of more than 1400 people this week found that the cost of living had surged to become the most pressing issue, with 62 per cent saying that cutting household expenses was now “extremely important’’.

Not surprisingly, the major political parties are tackling the issue head on.

The Coalition has cut the fuel excise in half, brought in targeted tax relief and taken steps to lower the costs of childcare, medicines and energy.

Labor maintains its policies will boost wages and childcare subsidies while it has also vowed to match the government’s tax relief initiatives, offer further assistance to first homebuyers and drive down energy costs.

In the meantime, consumers can take plenty of simple steps to ease the price squeeze. Among them are buying in bulk, using public transport, installing solar panels and taking lunch to work instead of eating out.