Inflation live updates: Annual figures hits 6.1 per cent

Inflation live updates: Annual figures hits 6.1 per cent

New inflation figures show consumer prices are rising faster than wages, with the annual rate hitting 6.1 per cent — the highest level since GST was introduced more than 20 years ago.

Follow all of the latest developments with our live blog.

live updates

By Shiloh Payne

The inflation rate was slightly below expected

Angela Jackson from Impact Economics is speaking on News Channel, she says the figure has come in “a bit below average”.

She says the market was expecting an increase of around 6.3 per cent.

“We are still in this post-pandemic period, where demand is very high, where we have supply side constraints and inflation is here for the foreseeable future,” Dr Jackson says.

“Overall, while this is a bigger number, it is probably not that bad a number.”

By Shiloh Payne

People making ‘impossible choices’ as inflation rises

Edwina McDonald, the acting CEO of the Australian Council of Social Services has described the increase in interest as “absolutely devastating and crushing”.

“We know that for people on low incomes, for the two or so million people surviving on less than $70 and many on the $46 a day of the job seeker payment, they have beep crushed by the increases,” Ms McDonald says.

“They are skipping meals and they have stopped using their car already.”

“They are accessing food relief services at high numbers, much higher than pre-pandemic and they are going to feel the increasing costs.”

She says there needs to be a raise in income support so people can afford to access basics.

By Shiloh Payne

The cost of vegetables has gone up

The main contributing factors to the rise of food was vegetables with prices going up 7.3 per cent in just three months.

ABC Business reporter David Chau describes it as “one heck of a price increase for vegetables”.

By Shiloh Payne

Most significant contributor was new dwellings

abc business reporter David Chau is on News Channel, here’s what he says about the announcement:

“Looking at the inflation figures, the most significant contributor to the increased cost of living in June quarter was new dwellings.

Construction costs up 5.5% and automotive fuel, petrol prices up 4%. That was despite the cut to the fuel excise.

Oil prices have surged so much during the June quarter.

Petrol prices contributed heavily to the increased cost of living but the good news is that petrol prices have come down more recently and if that holds, that should reflect favorably in the September quarter.

We are expecting a jump in electricity prices to offset that in Sept. The ABS says shortages of building supplies and labour, high freight costs, as in shipping, and ongoing high levels of construction activity continue to contribute to the price rises for newly built properties.

Automotive fuel – this is the eighth consecutive quarter that fuel prices have risen as well. That is the longest streak since the 1970s oil price shock.”

By Shiloh Payne

Key Event

The annual inflation figure has risen by 6.1 per cent

Inflation over the year to June hit 6.1 per centwhich is the highest level in 21 yearssince the GST was introduced.

The Consumer Price Index from the Australian Bureau of Statistics shows that prices rose 1.8 per cent in the June quarter, which was slightly below the March quarter inflation rate of 2.1 per cent.

By Shiloh Payne

This graph shows inflation over the years from 1948

A graph of inflation from 1948 to 2017
(Supplied: ABS)

By Shiloh Payne

Calculating the Consumer Price Index

In Australia, inflation is measured by looking at the different categories that consumers spend money on.

The ABS go around the capital cities to check the latest prices of thousands of items, which are grouped into 87 categories and 11 groups.

The statisticsians then calculate how much the prices have changed since the last survey three months earlier.

But the CPI doesn’t include everything, it doesn’t account for the cost of land or how much you’re paying on a mortgage.

By Shiloh Payne

Here’s a look at the last inflation figure

The last inflation figure, calculated during the first three months of the year, was 2.1 per cent.

Over the year to March, that meant the price of that basket of goods rose by 5.1 per cent.

The quarterly figure coming out today from the ABS is expected to be a little bit lower, at 1.8 per cent according to the average of economists surveyed by Reuters.

But the annual figure is likely to be much higher, around 6.2 per cent, because much lower quarterly price rises from last year keep dropping out of the data.

And many economists, including those at the Reserve Bank of Australia, expect price rises to get even worse before things get better, with CPI tipped to reach 7 per cent by the end of this year.

Price rises are already above that level overseas.

By Shiloh Payne

So what’s the reason everything is so expensive?

Inflation is reaching record-breaking highs around the world.

What causes inflation and what can be done to control it? Rachel Pupazzoni explains:

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Play Video.  Duration: 11 minutes 4 seconds

Why is everything so expensive?

By Shiloh Payne

Key Event

When will the figures be released?

We’re expecting the announcement on inflation figures to be released at 11.30 a.m.

We’ll bring you all of the latest details right here in our live blog.

By Shiloh Payne

Why is inflation so high?

It all comes down to supply and demand.

Supply is how much of something there is available and request is how much of that thing is wanted.

Probably the most basic concept in economics is that prices will adjust based on supply and demand, and vice-versa.

In other words, if people want to buy more of something than is available, then the price will go up to ration the goods to the people who are willing and able to pay that cost.

So with COVID, the war in Ukraine and flooding in eastern Australia, the production and distribution of many goods has been restricted.

You can keep reading more on this from business reporters Rachel PupazzoniMichael Janda and Lori Youmshajekian with the link below.

By Shiloh Payne

Inflation data to be released

Inflation data that is being released today is expected to show another jump in prices, up already from 5.1 per cent annually.

Good morning, I’m Shiloh Payne and I’ll be taking you through the latest updates on the the inflation figures.

We also have business reporter Gareth Hutchens with us to answer your questions on what the figures mean.

SW, what would you like to know?

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