Many working individuals are facing financial distress due to rising inflation, leading to increased calls for help from financial counsellors.
If you're struggling to pay rent, buy groceries and fill your car up with petrol, the news might concern you — and you're far from alone.
Moloney says during COVID-19 lockdowns, a number of people on middle and upper incomes built up a significant amount of savings.The pandemic significantly disrupted supply chains and, later, the invasion of Ukraine contributed to a global energy crisis.Together, Moloney says, these forces contributed to the "inflationary spike" that is causing many of the issues Australians are grappling with now.
"I think people look at that and they're like, 'OK, so everything's getting more expensive, and your solution is to make my house more expensive. I can't quite compute that.'"The logic behind raising interest rates, he says, is to "try and get aggregate demand and supply back in balance". To understand why, Moloney explains that we are an "international outlier" when it comes to variable rate mortgages.
"The people probably doing it toughest at the moment are people in private rentals facing increasing rates, high inflation and not seeing much of a pay rise."
Financial Struggles Inflation Rising Prices Working Individuals Financial Counsellors
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