OPINION: The price of the humble lettuce has become a sign of the times. But what happens to the economy and confidence when surging inflation requires interest rates to go up - and up?
Anthony Albanese jokes about putting “cabbage-gate” on the cabinet agenda in response to KFC’s decision to temporarilyHe certainly appreciates the potency of the imagery of the lettuce. It was used very successfully as a prop inThe price of lettuce has forced KFC to add cabbage to its burger range.
“Whether it is palm oil from Indonesia, wheat and sugar from India, or chicken from Malaysia, major food producers are tightening export policies to tame inflation and shore up domestic supplies,” it says. “Russia’s invasion of Ukraine could hardly have come at a worse time for global food logistics given the pandemic still has supply chains clogged up.”, Australia clearly gets the benefits as well as the costs of high prices and shortages.
Most economists are now in sombre agreement the Reserve Bank’s decision this week to raise the cash rate by 0.5 per cent – more than expected – was the correct move. It’s not considered logical for a central bank belatedly trying to curb inflation to be influenced by the pain of new home buyers facing the unhappy combination of declining prices and rising interest rates with little savings buffer built up. Bad luck.– possibly just as big.
of 3.9 per cent, this hardly seems the most pressing problem unless a global recession beckons. That’s still considered less likely than not.For now, Reserve Bank governor Philip Lowe may have gone too long in keeping rates low to get the unemployment rate down. But the mix of demographics and labour shortages means a sudden surge in job losses looks improbable.
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