The price of groceries will permanently be higher. Picture: NewsWire \/ Monique Harmer <\/p>\n
Milk, bread, petrol and other staples will be a permanent \u201csting\u201d for Australian shoppers, with the Reserve Bank confirming the higher cost-of-living is here to stay.<\/p>\n
RBA assistant governor Sarah Hunter on Tuesday warned households that prices will never return to pre-pandemic levels.<\/p>\n
\u201cThe cost-of-living is now higher and we are not trying to bring the price level down,\u201d she told the Australian Finance Industry Association conference on Tuesday.<\/p>\n
\u201cMy personal price point on this is the milk I get in the supermarket every week, which is an awful lot more expensive than what it was pre-Covid.\u201d<\/p>\n
The price of groceries will permanently be higher. Picture: NewsWire \/ Monique Harmer
The RBA says grocery prices won\u2019t return to pre-Covid prices. Picture: NewsWire \/ Monique Harmer <\/p>\n
Ms Hunter said while the bank targets inflation, it wants to keep prices within a range and they don\u2019t aim for deflation.<\/p>\n
\u201cThe price of milk will not go back to where it was pre-Covid, same with bread, other staples, petrol and so on,\u201d she said.<\/p>\n
\u201cWe all have to get used to that and we know it\u2019s tough and it stings when you do your weekly shop.\u201d<\/p>\n
Despite higher prices, Ms Hunter said over the past 12 months households were beginning to get on top of prices.<\/p>\n
\u201cHousehold conditions look like they are starting to improve, with a number of the fundamentals having started to turn in the last year or so,\u201d she said.<\/p>\n
\u201cWe are now in a position where wages are growing faster than prices, so the average workers are taking more home in real terms.<\/p>\n
\u201cWe also have the stage three tax cuts that came in a year ago and, if you have a variable mortgage, you\u2019ve had three interest rate cuts.\u201d<\/p>\n
Even with higher prices, Ms Hunter says the average Aussie is doing better than 12 months ago. Picture: NewsWire \/ Martin Ollman <\/p>\n
But the assistant governor conceded there are pockets still feeling the pinch.<\/p>\n
\u201cThere are always people experiencing difficult circumstances. We know that and it can be particularly challenging \u2026 those people are still there,\u201d she said.<\/p>\n
\u201cGenerally the measures of stress are starting to come off.\u201d<\/p>\n
Ms Hunter also conceded the benefits of rate cuts are not universal with those looking to get into the housing market or older Australians with savings doing worse compared to those with a mortgage.<\/p>\n
She also said underlying inflation is getting close to the bank\u2019s midpoint target of between 2 to 3 per cent and employment would likely to remain at its current levels.<\/p>\n
Underlying inflation, which strips out the more volatile items came in at 2.7 per cent over the June quarter.<\/p>\n
During its rate cutting cycle the RBA has cut interest rates three times \u2013 in February, May and August \u2013 by 25 basis points on each cut.<\/p>\n
Money markets are pricing in the bank will hold interest rates during its September meeting, but are expecting one more interest rate cut in November.<\/p>\n","protected":false},"excerpt":{"rendered":"The price of groceries will permanently be higher. Picture: NewsWire \/ Monique Harmer Milk, bread, petrol and other…\n","protected":false},"author":2,"featured_media":147912,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164,72272,99863,99861,46634,99862,16776,99860],"class_list":{"0":"post-147911","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy","12":"tag-grocery-prices","13":"tag-monique-harmer","14":"tag-ms-hunter","15":"tag-newswire","16":"tag-rba-assistant-governor","17":"tag-reserve-bank","18":"tag-sarah-hunter"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/147911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=147911"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/147911\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/147912"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=147911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=147911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=147911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}