Westpac chief economist explains how governments are contributing to inflation | The Business

Westpac Group’s Chief Economist Luci Ellis says Australia’s inflation problem is not as bad as it was two years ago but does need to come down. In potentially good news for mortgage borrowers, Dr Ellis says the RBA does not have to rely on interest rates alone. She says the high exchange rate for the Aussie dollar is going to assist to rein inflation in.

Luci Ellis spoke to Kirsten Aiken on ABC TV’s The Business after the RBA reversed course on interest rates and hiked the cash rate from 3.6% to 3.85%. She says the fight against inflation would also benefit from governments working to counter rises in administered prices.

“There has been an element of the recent higher inflation that is attributable to all layers of government, whether it’s council rates, decisions about water rates, decisions around tobacco prices. These are all pushing up inflation,” she said.
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