Australian Economy

What happens when the cost of living crisis drains all our savings?

Most of us have probably experienced a moment when the cost of living hit home. 

You may have been at the supermarket checkout, or the petrol station, or opening your energy bill.

It hits you right in the guts, and your inner monologue says: “That’s too much, but what can I do?”

We can measure this bill shock — it’s inflation or the Consumer Price Index (CPI). The Bureau of Statistics measures it at 5.1 per cent.

Treasurer Jim Chalmers says this “skyrocketing” inflation will “get worse before it gets better”.

So, what’s causing it? How high can it climb? And, realistically, can we cope with it?

Inflation building

As it gets colder across the country, households are fretting about their energy bills.

Last Thursday the peak “average spot price” for electricity — the wholesale price — rose to $733/MWh in New South Wales and $708/MWh in Victoria.

The price of unleaded petrol is hovering 10 cents below and above $2 a litre.

Posted , updated 

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