Inflation: The Silent Thief
Inflation is the rate at which prices for goods and services are rising over time. It is a major economic indicator, and it can have a significant impact on people's finances.
Australia's inflation rate is at its highest level in over 30 years, with the Consumer Price Index (CPI) rising by 6.0% in the year to June 2023. This is the highest inflation rate since the early 1990s.
The graph above shows that the CPI has been rising steadily in recent months, reaching a 30-year high of 6.0% in the year to June 2023. This means that prices for goods and services have increased by 6.0% on average over the past year.
There are a number of factors contributing to the high inflation rate in Australia, including:
- Supply chain disruptions: The COVID-19 pandemic has caused significant disruptions to global supply chains. This has led to higher prices for goods and services.
- The war in Ukraine: The war in Ukraine has also contributed to higher inflation. Russia is a major exporter of energy and commodities, and the war has disrupted supplies and pushed up prices.
- Strong domestic demand: The Australian economy is currently experiencing strong domestic demand. This is putting upward pressure on prices.
What are the implications of high inflation for Australian households?
The high inflation rate in Australia is putting pressure on Australian households. The cost of living is rising, and real wages are falling. This is making it difficult for Australian households to make ends meet.
There are a number of things that Australian households can do to cope with high inflation. These include:
- Budgeting: It is important to have a budget in place to track your spending and income. This will help you to identify areas where you can cut back on spending.
- Saving: It is important to save money in case of unexpected expenses. Aim to save at least 3-6 months of living expenses.
- Investing: Investing can be a good way to grow your money over the long term. However, it is important to do your research and understand the risks involved before investing. Working with a qualified share advisor like Sharewise can ensure you achieve your investment objectives and give you peace of mind knowing an expert is overlooking your portfolio for you.
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Disclaimer: This article does not constitute financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.
About Energy One Ltd Energy One Limited engages in the provision of software products, outsourced operations, and advisory services to wholesale energy, environmental, and carbon trading markets in the Australasia, and Europe. It offers egssPort Gas, a SaaS solution for gas shippers that handles natural gas and LNG operations; EnergyOffer, a bidding, offering, dispatch, and logistics solution; enFlow, a tool for automating and managing business processes, and for integrating systems; and enPrice, a scalable commodity retail pricing solution. The company also provides enTrader, an ETRM solution for energy markets; enVoy, a communications tool that provides an automated system for sending and receiving energy industry data; EOT that offers front, middle, and backoffice solutions; and eZ-Ops, an energy trading platform that focuses on automating physical gas, power logistics, and short-term portfolio. In addition, it offers NemSight, a Windows-based platform that displays information, including live prices, demand, constraints, generation, bidstacks and temperatures for the Australian electricity, gas and renewables markets; pypIT, a gas pipeline contracts management and scheduling platform; and SimEnergy, an energy trading and risk management (ETRM) solution that offers deal capture, settlements, and risk capability for traders, large customers, retailers, and generators. Further, the company provides power plant management system that manages daily market communication, intraday and day-ahead trading, and nominations for a power plant; energy advisory services; demand and weather linked risk management solutions; generation services; outsourced operations services; plat outage insurance; and managed services. Energy One Limited was incorporated in 1996 and is based in North Sydney, Australia. Key Stats
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