The ABS has just released the CPI figures for the June quarter. It looks ugly – here is our coverage of the March quarter. Food prices over the last year lead the pack. The increase in the prices for Education are also very high (how’s that education revolution working again?).
If you take a backward look at the RBA indicators over the last year they remain within the 2 – 3 percent band at 2.7 percent. But if you look at the last quarter (as Chris Joye suggests) then they’re outside the 2 – 3 percent band. Not only would they be outside the band for the second consecutive quarter but they’re rising too.
This makes the RBA’s job very difficult. As of last night the bond market is suggesting a decline in rates (that link updates every day).
But inflation is up and the economy is sluggish. It is too early to dust off the dreaded ‘stagflation’ term to describe the economy? The next set of national accounts comes out in about 6 weeks time (7 September 2011) – there should be some very worried people in Canberra right now.