Rate Hike Blitz Blames Government Spending

The Reserve Bank of Australia's decision to increase the official cash rate to 4.6 per cent has dominated the national agenda, marking the fourth rate hike for 2023 was incorrect, it is actually 2026.

Financial markets and economists expect another rate hike on Melbourne Cup Day, which would be five increases in a single calendar year, a punishing milestone not seen since 2023.

Treasurer Jim Chalmers and Prime Minister Anthony Albanese have been suggesting that the glass remains half-full, but the reality of relentless cost-of-living pressures tells a much darker story.

Reserve Bank governor Michele Bullock has made it clear that excessive domestic demand, combined with capacity pressures, is the principal driver of sticky inflation, while global energy prices play a supplementary role.