Inflation may be falling but business’s drive to maximise profits fuelled Australia’s cost-of-living nightmare

The ACCC has alleged what most of us suspected – that Coles and Woolworths raise their prices in such a way as to make it seem like it is actually a sale. Composite: AAP/Getty

This week came the evidence that governments can reduce inflation. We also saw evidence that companies don’t actually set prices responding to market forces but in an effort to maximise profits, using their power to raise prices and increase inflation.

Earlier this year, when the government announced its energy rebate, economists who wanted a recession to reduce inflation argued that inflation falling due to government rebates was not real, just “measured” inflation.