After Thursday’s announcement that cabinet ministers Linda Burney and Brendan O'Connor were stepping down from the frontbench, all public attention came on to the reshuffle to be unveiled on Sunday.
Behind the scenes, however, something else is preoccupying the government. Ahead of the June quarter inflation figure out on Wednesday, the collective holding of breath is palpable. That number, and its consequences, could affect the government’s political fortunes for months.
The markets expect inflation to increase from the previous quarter’s 3.6% annual figure. If that happens, days of debilitating public speculation will follow, about whether the Reserve Bank at its August 5–6 meeting will raise interest rates or decide, in light of an economy that’s crawling along the ground, to hold them steady.
