are a stark reminder to new Reserve Bank governor Michele Bullock of the long-gruelling battle that lies ahead reining in the rise of consumer prices to the central bank’s 2 per cent-to-3 per cent target range.
And the country’s dire shortage of rental accommodation, at a time of soaring migration, is driving vacancy rates lower, and pushing rents ever higher. Rental costs climbed 7.8 per cent in the 12 months to August 31, up from 7.6 per cent in July and 7.3 per cent in June.The problem for Bullock and the RBA’s policy-setting board is that existing inflationary strains show little signs of easing, at a time when new price pressures are emerging from the surge in global oil prices.
Australia is already feeling the heat from higher global oil prices with automotive fuel prices surging 13.9 per cent in the 12 months to August. Bullock is also deeply conscious that Australia’s dismal productivity performance is exacerbating the inflation challenge she faces.