At first glance, the impact of this month’s sales tax hike on inflation and so on real incomes will be small. Headline inflation will probably rise by only 0.4%-point in October. But that’s partly because the impact will be offset by the government’s introduction of cheaper childcare. That’s helpful for many families, but for most households, the tax hike will still reduce their disposable income significantly.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services