Inflation breaks the 5% barrier

Ok, so our pick of 5%pa inflation by September following the Budget was wrong – its even worse at 5.1%. Largest increase since June 1990!

I blame the re-weighting for the difference 😉

Note it will not stay over 5% for long – underlying “true” inflation (stemming from inflation expectations and its impact on the quantity of money) is closer to 3.5%.  Although I would like to point out that non-tradable inflation is horrendous at 4.1%pa – horrendous!

  • iPredict picked it…

  • “iPredict picked it…”

    I saw that – good stuff iPredicit. Although I don’t think iPredicit would have been picking this level of inflation at Budget time (May) 😛

  • Miguel Sanchez

    It staggers me that the govt subsidies for healthcare and early childhood education (which have now dropped out of the annual rate) had more impact on non-tradable inflation than 300-odd points of rate hikes. On the other hand, maybe that’s the solution to our inflation problem – subsidies for all!

  • “On the other hand, maybe that’s the solution to our inflation problem – subsidies for all!”

    😛

    I fear thats the sort of madness that politicians might actually believe – wash your mouth out 😉