Fruit and veg 20 per cent more expensive than last year
New data underlines how fresh fruit, vegetables and seafood prices have soared.
Australians are paying nearly 20 per cent more for fruit and vegetables than a year earlier, and 15 per cent more to fill up the car, as new inflation data confirmed the cost of living crunch facing households ahead of further mortgage pain when the Reserve Bank meets next week.
In only its second monthly consumer price index report, the Australian Bureau of Statistics confirmed an accelerating trend in annual inflation over recent months, from 5.5 per cent in May to around 30-year highs of 6.8 per cent in August.
The strongest price gains were concentrated in essential items, with meat and seafood up 7.3 per cent in the year to June, taking the annual increase in food from 6.4 per cent in June to 9.3 per cent in August.
Annual inflation for automotive fuel, however, dropped sharply from 43 per cent in June, to 15 per cent in August. Building cost growth appeared to have plateaued, but still ran 20 per cent higher than a year earlier.
Rental cost growth also accelerated but remained a fraction of the double-digit surge in asking rents, from 1.6 per cent in June to 2.4 per cent in the most recent figures.
Jim Chalmers said “the new monthly consumer price data confirms what Australians know every time they pay a bill or visit a store – prices are rising and their wages just aren’t keeping up”.
“There’s no sugar coating the fact Australians right now are doing it tough, with falling real wages, rising prices, and higher interest rates,” the Treasurer said.
“That’s why the budget we deliver in less than four weeks’ time will provide responsible cost-of-living relief that Australians deserve in a way that doesn’t put extra pressure on inflation and interest rates,” Dr Chalmers said.
CBA head of Australian economists Gareth Aird said the new data suggested inflation would rise from 6.1 per cent in the June quarter, to 7 per cent in September.
Analysts said the figures confirmed expectations the RBA would deliver a fifth consecutive jumbo rate hike on Tuesday, from 2.35 per cent to 2.85 per cent.
RBA deputy governor Michele Bullock last week said it would take time “to figure out what is the noise and what is the information in the monthly figures”.
Still, NAB economist Taylosr Nugent said “the information it does contain is consistent with elevated or quickening underlying inflation pressures even as lower fuel prices provide some offset to headline”.
“With the labour market remaining tight and resilience being shown by households as seen in retail sales yesterday, we expect the RBA to increase interest rates by a further 50 basis points in October, before stepping back to a 25 basis-point hike in November and pausing in December to monitor the impact of prior tightening on the economy,” Mr Nugent said.
Capital Economics senior economist Marcel Thieliant said the data “didn’t include any update to utilities prices, which are only surveyed quarterly”.
“While the RBA thinks that any increase in the second half of the year will be broadly offset by (energy) rebates, we still expect inflation to climb towards 8 per cent by the end of the year,” Mr Thieliant said.
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