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Tomorrow the Australian Bureau of Statistics will release inflation data for the June quarter (and the 2020-21 financial year), and it's expected to be the biggest in years. According to Moody's, June quarter CPI will show a 3% annual rate -- or according to the AMP’s Shane Oliver, as high as 3.9%.

Part of that is statistical: the -1.9% figure from the pandemic June quarter last year will drop out of the annual figure tomorrow, so there'll be a big rise in the annual rate anyway. But the quarterly figure for June 2021 is also expected to show a sharp rise of 0.8%, reflecting a 7.5% surge in petrol prices, higher electricity prices in WA and some pick up in dwelling purchase prices and rents.

“Underlying inflation will likely accelerate reflecting supply constraints and strong demand to +0.5% quarter on quarter and an annual rate of 1.6%," Oliver suggested. Producer price inflation is also likely to rise, due to higher commodity prices, when that figure is released on Friday.