Money Matters: Inflation jumps above target

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Episode Transcript

Speaker 1 (00:01):
Or hopes of a Melbourne Cup rate cut have been
dashed after the latest inflation figures showed the cost of
living is rising faster than expected. Headline inflation jumped to
a fifteen month high of three point two percent, above
the Reserve Bank's target of two to three percent, and,
perhaps more troublingly, underlying inflation, the really important one also

(00:22):
rose for the first time in almost three years. Joining
us now as financial advisor Betsy Westcock, Good morning to you.
So economists were expecting an increase to inflation, not by
this much, though, Does this mean the rate cuts are over?

Speaker 2 (00:36):
I think you can be pretty certain that we're not
getting a rate cut on Melbourne cut day. We did
expect that this was going we we're going to see
an uptick in inflation, but this jump beyond one percent
up to that three percent for core inflation really caught
everyone off guard. And you know, Michelle Bullock, the RBA governor,
has been really clear she's going to be data driven
around her decisions. She doesn't want to see inflation spike further.

(00:58):
So can you can expect her to sit on our
hands with this one?

Speaker 1 (01:01):
Okay for how long? Because some economists are saying the
next move will be up. We're talking about an increase
in rates and it'll be mid next year.

Speaker 2 (01:09):
Well, I don't know about an increase in up. It
really depends on the data. But we had that unemployment
data come out just a few weeks ago where it
said that employment was ticking up at four point five percent.
So this is that balancing act and that real push
pull that the RBA is going to have to contend with,
because yes, inflation is proving stickier and it's really affecting
those categories like housing, electricity, transport, food, and so forth,

(01:31):
which really hits those load of middle income households. But
if unemployment's rising, that suggests that the economy is not confident.
We also got that consumer confidence data which was showing
that that's pretty fragile right now. So I don't think
we'll see a spike unless something unexpected happens there. I
do think we might see some easing sort of mid
next year. So it's a way to watch.

Speaker 1 (01:51):
Okay, if you were the treasurer who's saying, oh no,
we expected this, it's all good. If you were the treasurer,
what on earth do you do now? Because this is
a really difficult situation.

Speaker 2 (02:01):
It sounds yeah, And look, I don't know if the
treasure has a lot of influence in this sense. What
I would be saying to anyone watching home right now
is take the power back into your own hands and
really fight inflation on the home front. So if you've
got a mortgage, be renegotiating your bill, review your electricity prices.
With Energy made it easy, you know, shop smarto at
the grocery store, use petrol spiderfy in the best fuel price,

(02:22):
and be really savvy when you're planning those Christmas holidays.
And that's the way that you can take the power
back into your own hands and save thousands of dollars
a year, regardless of what's happening with the IVY.

Speaker 1 (02:31):
Excuse yeah, okay, because we're in this awful situation again
for a lot of people who have a mortgage. Of course, Betsy,
thank you very much.