1
00:00:00,240 --> 00:00:02,160
Speaker 1: So the wash up on inflation seems to be this

2
00:00:02,320 --> 00:00:04,480
Speaker 1: two point seven wasn't the two point nine they thought

3
00:00:04,480 --> 00:00:06,840
Speaker 1: it might be. The non tradable stuff like rates is

4
00:00:06,840 --> 00:00:08,640
Speaker 1: still a real issue. Of course in the RB will

5
00:00:08,640 --> 00:00:11,200
Speaker 1: have seen this, and basically I'm assuming locked in another

6
00:00:11,280 --> 00:00:14,120
Speaker 1: interest ratecoup next month. Mike Jones is the ben Z's

7
00:00:14,160 --> 00:00:17,360
Speaker 1: tip economists and as well as Mike Morning. What am

8
00:00:17,360 --> 00:00:19,720
Speaker 1: I The band is still going to be breached? Isn't

9
00:00:19,720 --> 00:00:21,680
Speaker 1: it eventually? Sometimes this year they're going to go above

10
00:00:21,680 --> 00:00:22,200
Speaker 1: three aren't they?

11
00:00:23,400 --> 00:00:26,440
Speaker 2: I think it's a real chance. But I think the takeaway,

12
00:00:26,440 --> 00:00:28,840
Speaker 2: as he said from the numbers yesterday, was that bet

13
00:00:29,920 --> 00:00:33,720
Speaker 2: reducers now not only breaching three percent, but also getting

14
00:00:33,800 --> 00:00:36,000
Speaker 2: stuck above three percent, which which might have been an

15
00:00:36,000 --> 00:00:41,400
Speaker 2: issue for inflation and expectations it self perpetuating aspect of inflation.

16
00:00:41,560 --> 00:00:43,519
Speaker 2: So yeah, I think it's a green light or the

17
00:00:43,560 --> 00:00:46,520
Speaker 2: bank they can probably feel more comfortable in getting cracking

18
00:00:46,560 --> 00:00:48,120
Speaker 2: on rate caps again next month.

19
00:00:48,800 --> 00:00:51,199
Speaker 1: And so what have they learnt then? Given they this

20
00:00:51,400 --> 00:00:54,639
Speaker 1: month they didn't and next month they will, and then

21
00:00:54,680 --> 00:00:56,760
Speaker 1: maybe they'll go again later on this year? What what's

22
00:00:56,880 --> 00:00:58,560
Speaker 1: changed material in the last week or so?

23
00:01:00,120 --> 00:01:02,000
Speaker 2: Well? I mean one is your head on inflation is

24
00:01:02,200 --> 00:01:04,080
Speaker 2: a little bit lower. I think as we've seen the

25
00:01:04,160 --> 00:01:07,520
Speaker 2: data come in as well, it's still pretty soggy and

26
00:01:07,760 --> 00:01:10,640
Speaker 2: uninspiring sort of stuff as well. So I think that

27
00:01:10,760 --> 00:01:16,520
Speaker 2: means that or median term inflation, but that particularly focused

28
00:01:16,560 --> 00:01:18,520
Speaker 2: on they can be a little bit more confident that

29
00:01:18,640 --> 00:01:21,920
Speaker 2: once we get through this burst of temporary higher inflation,

30
00:01:22,040 --> 00:01:24,040
Speaker 2: that will settle down to back to two percent or

31
00:01:24,040 --> 00:01:25,800
Speaker 2: a bit below because the economy has got lots of

32
00:01:25,840 --> 00:01:29,640
Speaker 2: spare capacity right as if the activity is racing away,

33
00:01:30,360 --> 00:01:35,040
Speaker 2: and so lower interstrates are probably required to try and

34
00:01:35,560 --> 00:01:39,240
Speaker 2: boost activity and ensure inflation doesn't fall too far below

35
00:01:39,280 --> 00:01:40,319
Speaker 2: two percent next year.

36
00:01:40,520 --> 00:01:42,680
Speaker 1: But do you know, I mean you're the expert, I'm not,

37
00:01:42,800 --> 00:01:44,720
Speaker 1: But I'm looking at the low number of what was

38
00:01:44,760 --> 00:01:47,680
Speaker 1: at one point two versus three point seven? How low

39
00:01:47,720 --> 00:01:49,600
Speaker 1: does that need to go? Because the councils are not

40
00:01:49,640 --> 00:01:51,560
Speaker 1: going to stop charging, and the CIA is not going

41
00:01:51,600 --> 00:01:53,680
Speaker 1: to stop charging, the insurance is not going to stop

42
00:01:53,760 --> 00:01:56,480
Speaker 1: going up. So when does all that finish and then

43
00:01:56,560 --> 00:01:58,320
Speaker 1: flow through to a lower inflation number.

44
00:02:00,120 --> 00:02:02,520
Speaker 2: Well, we think we've got another quarter to come where

45
00:02:02,560 --> 00:02:05,560
Speaker 2: you're going to get higher headline inflation. So the third quarter,

46
00:02:06,400 --> 00:02:09,160
Speaker 2: we think we might get a two point nine, but

47
00:02:09,600 --> 00:02:13,239
Speaker 2: our hope is that that is the peak and thereafter

48
00:02:13,360 --> 00:02:16,240
Speaker 2: we start to see things tail away. I mean, one

49
00:02:16,280 --> 00:02:18,840
Speaker 2: thing that really jumped out from the numbers yesterday is

50
00:02:18,919 --> 00:02:23,840
Speaker 2: this gap that's opened up between its essentials inflation and

51
00:02:23,960 --> 00:02:27,160
Speaker 2: non essentials, sort of like not all inflation has created

52
00:02:27,200 --> 00:02:32,560
Speaker 2: equal It's hardly the sort of indicative of an accelerating economy.

53
00:02:33,160 --> 00:02:35,720
Speaker 2: The sort of inflation that we're getting in and of itself.

54
00:02:35,800 --> 00:02:38,400
Speaker 2: The fact that you're getting these higher costs for the

55
00:02:38,480 --> 00:02:42,840
Speaker 2: lights of food and energy, pulling income away from households

56
00:02:42,919 --> 00:02:46,000
Speaker 2: should actually slow things down even more, you know, retail

57
00:02:46,040 --> 00:02:49,680
Speaker 2: spending in the economy more generally. So I think we've

58
00:02:49,720 --> 00:02:51,720
Speaker 2: still got enough via I mean, it's pretty hard to

59
00:02:51,760 --> 00:02:54,600
Speaker 2: be confident about anything in the current environment, but there

60
00:02:54,639 --> 00:02:57,519
Speaker 2: are enough well there's enough evidence to suggest that this

61
00:02:57,680 --> 00:02:59,519
Speaker 2: is a temporary bout of inflation and we'll start to

62
00:02:59,560 --> 00:03:00,480
Speaker 2: set things cool off.

63
00:03:00,760 --> 00:03:02,919
Speaker 1: Boy, I hope you hope you're right. Mike, Appreciate it.

64
00:03:03,040 --> 00:03:05,679
Speaker 1: Mike Giants, who is the benzid's chief economist.

65
00:03:06,200 --> 00:03:09,079
Speaker 2: For more from the Mic Asking Breakfast, listen live to

66
00:03:09,200 --> 00:03:12,240
Speaker 2: news talks it'd be from six am weekdays, or follow

67
00:03:12,320 --> 00:03:13,840
Speaker 2: the podcast on iHeartRadio