While troubling, Australia isn’t the only country grappling with soaring inflation.
The successive hikes represent the most aggressive tightening in three decades in the world’s biggest economy.
Canada also recently increased its cash rate by a massive 1.00 per cent, with its inflation rate sitting at 8.1 per cent.
How Australia’s inflation and cash rate compare to other countries
|Official rate –start of 2022||Official rate –today||Last change||Current inflation rate (p.a.)|
|Australia||0.10%||1.35%||+0.50%, July 2022||6.1%|
|United States||0.00% – 0.25%||1.50% – 1.75%*||+0.75%, July 2022||9.1%|
|European Union (Main refinancing options)||0.00%||0.50%||+0.50% July 2022||8.6%|
|United Kingdom||0.25%||1.25%||+0.25% June||9.4%|
|Canada||0.25%||2.50%||+1.00%, July 2022||8.1%|
|New Zealand||0.75%||2.50%||+0.50%, July 2022||7.3%|
|Japan||-0.10%||-0.10%||-0.10%, Jan 2016||2.4%|
Ukraine crisis driving global inflation
Around the world, inflation has been soaring due to the conflict in Ukraine driving up commodity and fuel prices.
This has driven up the costs of manufacturing goods and moving them around.
Labour shortages have also been adding pressure, forcing businesses to charge more for goods and services.
“Central banks around the world are moving quickly to try to contain the inflation beast, with hefty hikes to official rates,” RateCity research director Sally Tindall said.
“Every other week, families are finding their grocery bills are growing, the car is more expensive to fill up and the cost of their takeaway coffee keeps hitting record highs.”
She recommended putting pen to paper to come up with a financial strategy to get through the next 12 months.
“For some households, it’ll be a few nips and tucks to their budgets, but for others, it’ll involve making tough decisions,” she said.