Inflation breaks the 5% barrier
Posted October 21, 2008
on: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 ๐
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%.ย Although I would like to point out that non-tradable inflation is horrendous at 4.1%pa – horrendous!
4 Responses to "Inflation breaks the 5% barrier"
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!
1 | Eric Crampton
October 21, 2008 at 10:32 am
iPredict picked it…