The Reserve Bank lited interest rates by 0.25% today to 6.75%, ignoring an election campaign and the obvious discomfort of the Howard Government, plus a lot of other people with mortgages and other loans.
The rate rise will likely be followed quickly by banks and others looking to lift rates to recapture margin lost in the subprime mortgage induced credit free.
And economists now say there's a chance of another rise before Christmas, or early in the New Year. (See the next story) with the RBA warning that it wants to see a slower rate of growth in the economy next year.
The timing of the next rise is the only variable and will depend on how quickly inflation falls from the second quarter onwards and how economic growth does in the domestic economy.
The bank acknowledged that there is a considerable head of steam in the economy and it talked about slowing inflation in the 'medium term' which is something like a year to 18 months out.
So we face the prospect of a possible rate rise to 7% midway through next year and rates at recdent highs well into 2009.
Record car sales for October awere another indicator pointing strongly towards a rate rise. That the record was set when oil prices raced through $US90 a barrel is another sign of the strength of demand and confidence among consumers.
That collection of data from Monday, especially the TD Securities inflation gauge and the ANZ jobs series confirmed again the twin menaces to the economy and the long expansion.
Inflation is currently running at or just above the 3% mark: in fact it was running at an annual rate of 3.5% by the Reserve Bank's own measures of core inflation in the September quarter and that was confirmed in the TD Securities figures.
The TD Securities-Melbourne Institute monthly inflation gauge showed an annual rate of 3.3%, the highest annual increase since March, and above the RBA's 2%-3% inflation target.
The ANZ jobs figures show that while the growth in employment is slowing, many jobs remain unfilled or are proving very hard to fill.
Online advertising in particular is strong and a sign that employers are trying to harvest as many applicants from as wider pool as possible, without all that much success in many cases.
The ANZ Bank said the number of jobs advertised in Australia in October was a monthly record high.
The ANZ says its job ads series showed the total number of jobs advertised in major metropolitan newspapers and on the internet rose by a seasonally adjusted 2.7% to an average of 254,554 a week.
It is the highest number of job ads recorded in any month since the survey began and came after several months of static performance.
To show it another way, the October jobs total was a huge 30.5% higher than October 2006, surely the best sign of the enormous jobs boom we are having and the difficulties employers are having filling these positions.
No matter how the pollies pitch the rate rise as being bad or good, it is needed on top of that to stop any further acceleration in the rate of inflation over the next year to 18 months and to ease the pace of growth in the non-resource economy to allow some of the pressure to ease on capacity.
Figures out tomorrow for October will confirm a solid month for jobs.
What would hearten the RBA in coming months is for employment to slow to where there's some kick upwards in the unemployment rate from the present 33 year low of 4.2%.
That would indicate the rapid growth rate in the domestic economy of more than 5% at the moment, is slowing.
But it would also be a bit of a warning for banks and financial groups worried about high individual debt levels.
