The RBA is increasing interest rates to counter inflation – but it will also slow wages growth

Vegetable prices rose on average 7.3% in the June quarter because of flooding across eastern Australia earlier in the year – a price rise interest rate changes are unlikely to affect. Photograph: Joel Carrett/AAP

The latest inflation figures show that prices rose faster over the past year than they have since the GST was introduced. This means that the ability to buy things with your wage is now back where it was when the ALP was last in power. Fast-rising prices, combined with low wage growth, has seen a decade of real wage growth wiped out.

The latest inflation growth figure of 6.1% over the past year was actually greeted with little surprise: it was pretty much around the expectations. Yet we should not ignore just how unusual this is.