Since the RBA raised the cash rate from 4.10% to 4.35% in May – the third straight rate hike – unemployment has risen to 4.5% and the March quarter National Accounts reveal household discretionary spending was already stalling before the rate rises, as households cut back in order to pay for essentials.

“The current level of inflation has not been driven by either wages or consumer spending,” said Greg Jericho, Chief Economist at The Australia Institute.

“Rather, it’s been driven by increased profits and the war in Iran.

“For too long the Reserve Bank has punished households out of a belief that a wage-price spiral was just around the corner.

“Maybe they finally get it. Maybe the RBA board members understand they’ve been unfairly inflicting unnecessary pain on mortgage holders.”