Inflation surges as energy rebates run out of gas
Jacob Shteyman |
Inflation has surged to 3.8 per cent, above analyst expectations, as energy rebates dropped off and housing costs climbed.
Although the monthly consumer price index was flat in October, a fall in inflation a year prior resulted in the annual figure jumping from 3.5 per cent to a 16-month high, the Australian Bureau of Statistics reported on Wednesday.
Electricity was the biggest contributor, up 37.1 per cent in the 12 months to October.
“The annual rise in electricity costs is primarily related to state government electricity rebates being used up by households,” the ABS said.
“The timing of the rollout of the Commonwealth Energy Bill Relief Fund rebates also impacted electricity costs.”
The food and non-alcoholic beverages and recreation and culture categories both rose 3.2 per cent.
Wednesday’s release was the first publication of the ABS’s long-awaited “full” monthly consumer price index, which will provide the Reserve Bank a more timely and more accurate gauge of price pressures in the economy.
But ANZ senior economist Adelaide Timbrell said the RBA board was unlikely to place much weight on the result at its next interest rate meeting, given they will still prioritise the quarterly inflation release until seasonal gremlins were ironed out of the new publication.
Trimmed mean inflation, which smooths out volatile items, rose from 3.2 per cent to 3.3 per cent over the year.
After leaving the cash rate on hold at 3.6 per cent on Melbourne Cup day, RBA governor Michele Bullock said the bank thought a spike in inflation in the September quarter was largely down to temporary factors.
But she noted there could be some “signal” amid the noise in the data in the form of rising housing and market services prices, which could indicate inflation was more entrenched.
Housing costs increased, with rents up 4.2 per cent over the year and new dwelling price growth climbed from 1.5 per cent to 1.7 per cent.
Services inflation was 3.9 per cent, up from 3.5 per cent in the 12 months to September.
Earlier on Wednesday, Treasurer Jim Chalmers rejected claims government spending had played a part in inflation figures, pointing to the fact Labor had banked more of the upward revisions to revenue than it had spent in its time in office.
“Right across the board we’re taking a more responsible approach to the budget,” he told reporters.
ABS chief statistician David Gruen said the release, which was the first time the bureau has published a full monthly CPI, was a “major milestone for Australia”.
AAP
