(Image: Private Media)
(Image: Private Media)

Yesterday Canada’s central bank lifted its cash rate by 1%. Inflation there is 7.7%. Now, the question is whether the US Federal Reserve will do the same at its next meeting later this month. Overnight, the latest American consumer price data showed inflation hitting a 40-year-plus record rate of 9.1% in June.

Across developed economies, there is now an arms race in rate rises: from 0.50%, which was once considered to be extreme but is now commonplace, to 0.75% (now standard) to 1%, now a strong tip rather than an outlier. The Reserve Bank of NZ yesterday posted its third 0.50% rise in a row.

And the lessons, if any, for Australia? It largely depends on the consumer price index (CPI) to be released in the final week of this month. Economists are already forecasting a rise of up to 2% for the quarter to take the annual inflation rate past 7%. Year on year to the end of March, it was 5.1%.