Australia inflation rate hits 4.3% as transport and housing costs drive the rise
Australia's annual inflation rate climbed to 4.3%, with the Australian Bureau of Statistics releasing the consumer price index figures on Wednesday. Transport and housing costs were the main drivers behind the acceleration.
Australia inflation rate hits 4.3% as transport and housing costs drive the rise
Transport and housing lead the price rises
Consumer price index figures released by the Australian Bureau of Statistics on Wednesday show Australia's headline inflation rate accelerating to 4.3% annually. Within the index, the biggest moves were in transport and housing, while food also kept climbing.
- Transport costs rose 8.7% over the past 12 months
- Housing costs were up 5.2%
- Food prices jumped 3.2% in a year
According to the ABS, housing - the single biggest category in the CPI - was the largest contributor to annual inflation, followed by transport costs.
Why transport and housing costs climbed
The ABS attributed much of the transport rise to escalating fuel prices stemming from the US and Israel conflict. Housing pressure, meanwhile, reflects builders passing on higher costs for materials and labour on new dwellings, alongside elevated electricity prices.
Underlying inflation still above target
The RBA's preferred measure of underlying inflation came in at an annual 3.6% to September, well short of the bank's 2.5% target. Reserve Bank of Australia officials have signalled the board may need to lift borrowing costs further to drag price growth back toward that target, warning of a "materially worse" inflation outlook.
RBA deputy governor warns of expectations risk
At senate estimates on Wednesday, RBA deputy governor Andrew Hauser described the inflation numbers as "too high" and flagged a "nightmare" risk that longer-term inflation expectations would pick up.
We don't think it is necessarily crystallising yet, but it is a particular risk,
Hauser said of that risk.
What happens next
The cash rate already stands at 4.6%, its highest level in 15 years, and the RBA's next monetary policy decision is due on 3 November, with most economists tipping another cash rate increase. The pressure on households is compounded by rising costs for everyday goods and services landing at the same time as unemployment lifts.
