The June quarter GDP figures released yesterday reveal just how badly the Reserve Bank has misread the economy. Its decision to sharply raise interest rates has not only failed to reduce inflation but delivered an economy reliant on population growth and government spending to stop it from going into a recession.

A month ago when announcing the bank would keep rates on hold, the RBA governor, Michele Bullock, told the media that “the board does remain concerned about the degree of excess demand in the economy”.

Well, she should be happy now because the latest GDP figures show there is no demand in the economy. Household spending fell in the June quarter and business investment barely did a thing.

She also told reporters “what we’re dealing with is continued strong demand, particularly for services”.

Again, she should be ecstatic because household spending on services fell 0.3% in the June quarter (that would be a month before she was telling us we needed to be worried about the “strong demand”).

Also last month, the assistant governor of the RBA, Dr Sarah Hunter, suggested to a Senate committee that “the economy is running a little bit hotter than we thought previously.”

Well, pop the champagne, because the economy is now chilly cold.

These figures show that in April, May and June – well........

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