The cost of living has reached a record high, businesses are struggling, and interest rates are rising. Is a recession coming?

Living costs are at their highest level since the Australian Bureau of Statistics began measuring them. (ABC Melbourne: Kristian Silva)

Newly released data shows living costs are at a record high, consumers are spending less, and businesses have been shrinking for a year — a day after the Reserve Bank of Australia controversially raised interest rates to 3.85 per cent.

Figures released by the Australian Bureau of Statistics show the living costs are the highest they have been on record, and are higher than the current rate of inflation.