
Which prices are going to jump to push inflation above 7 per cent?
ABCAustralia has just seen its highest inflation level since the introduction of the GST pushed up many prices by 10 per cent overnight. ANZ senior economist Catherine Birch says electricity and gas together are likely to contribute 0.6 of a percentage point to the bank's forecast of 7 per cent annual inflation by year's end. Westpac tips a 1.1 per cent rise each quarter for the rest of this year, while also forecasting the cost of fruit and vegetables may even come down slightly in price in the current quarter. Combined with a steep jump in many airfares, Westpac is expecting holiday travel prices to rise 1.9 per cent in the September quarter before surging 6.1 per cent ahead of Christmas and the summer holidays. "Input prices to the house construction industry rose 4.3 per cent in the quarter and 17.3 per cent over the year – the biggest annual increase in 42 years," notes CommSec chief economist Craig James, referring to the ABS producer price data.
History of this topic

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