Australia’s inflation has risen again, effectively eliminating any realistic prospect of an interest rate cut in 2025 and even reviving concerns that the Reserve Bank may be forced to lift rates further.
New data from the Australian Bureau of Statistics shows that while the monthly consumer price index (CPI) remained unchanged in October, annual inflation climbed to 3.8 per cent, up from 3.6 per cent in September. The increase also extended to the trimmed mean inflation measure – the RBA’s preferred gauge of underlying price pressures – which rose from 3.2 per cent to 3.3 per cent.
The headline figure exceeded economists’ forecasts of 3.6 per cent, placing inflation clearly outside the RBA’s target band of 2–3 per cent.
“If there was any hope of an interest rate cut, it’s gone now,” 9News political editor Charles Croucher said. “This number is worse than expected, even worse than the pessimistic predictions.”
Today’s data carries added significance, marking the first full monthly CPI published by the ABS rather than an indicative subset. Its release comes just days ahead of the RBA’s final cash rate meeting for the year on December 9.
Harry Murphy Cruise of Oxford Economics said the figures are bleak enough that a rate hike can no longer be dismissed.
“All up, it’s a pretty ugly inflation print,” he said. “For the RBA, this keeps cuts off the table. In fact, a hike can’t be ruled out.”
Housing costs continue to be the strongest contributor to inflation, with soaring electricity bills and rental prices driving much of the increase.
