A fifth increase to the official cash rate in as many months has rapidly brought interest rates within the Reserve Bank's target band, confirming the ongoing cost pressures faced by households and businesses alike.
"While the cost of living is undoubtedly a challenge being experienced across the economy, so too is the cost of doing business," ACCI chief executive Andrew McKellar said.
"Households are not alone in being squeezed by rising interest rates and surging inflation. Businesses have also been hit with higher repayments on capital investment, as well as soaring costs for fuel, electricity, materials, and labour.
"Fresh retail sales figures and household spending data released this week confirms that the economy is still running hot. To reduce excess aggregate demand and the risk of runaway inflation, the RBA should look at the impact of previous rate rises and keep a close eye on prices growth in the months ahead.
"Given the fragile state of both the budget and wider economic recovery, Australia cannot afford for higher prices to become embedded. Looking at the economies of Europe and the United States it's clear to see there is a very real risk of entrenched inflation.
"Last week's Jobs and Skills Summit achieved a number of important wins for business. Taking steps to implement a number of short-term outcomes will be critical in reducing the cost pressures faced by households and by businesses.
