We know inflation is here, but what can we do about it?

New data from various sources predict inflation to reach its highest level in more than 30 years by the end of July. 

• Higher labour costs and higher-than-expected purchase costs will contribute to higher quarterly inflation.
• Inflation could peak at 7.2% in late July - well up from the 5.1 percent reported in March. 
• This will be the highest level since inflation reached 7.7% in June 1990. 

“Both purchase costs and labour costs are running at record levels which is reflective of the significant global supply shocks that are still flowing through, as well as domestic energy disruptions and the very tight local labour market” - Mr Oster, Chief Economist at NAB said.

The pain felt by Australians will be severely hit by the end of the month when inflation expects to reach its 30-year high and will continue with the high cost of living and it's unlikely to get better in the near future.

Consumers and businesses are well aware that their bills will skyrocket in the next 12 months with rising expenses of interest rates, record-high petrol prices, and soaring grocery costs.

Price measures in the June survey confirm we are heading for another powerful inflation print for Q2 when CPI is released later this month – possibly as high as 1.5-1.6 percent in underlying terms.

The Bank for International Settlements (BIS) predicts that the world's major economies are at risk of reaching a bleak new “tipping point” where rising inflation will become the new norm. 

• In the latest annual report, BIS predicted that if this happened, it would be very difficult for central banks to control inflation.
• In the worst-case scenario, the global economy could enter a period of stagflation, with both low growth and high inflation, if not a complete recession.

Enough of the gloom, can you do it? What are the things YOU can control?

• Make A Budget: A budget can help you control your finances and make it easier to save money for your goals. You can take reference to the 50/30/20 rule which basically is to divide up after-tax income and allocate it to spend: 50% on needs, 30% on wants, and socking away 20% to savings to plan your budget.
• Pay off existing variable debt: If you are able to, as the interest rate might continue to increas