Prices in Australia are climbing faster again, even as unemployment lifts and the economy slows down. Official data released on Wednesday shows that headline inflation accelerated to 4.3% in the year to September. This unexpected jump is putting fresh financial pressure on households that are already struggling with the cost of living.
Everyday expenses are driving much of the increase. Transport costs jumped 8.7% over the past 12 months, mainly because conflict in the Middle East has pushed up fuel prices. Housing costs also rose 5.2% as builders passed on higher bills for materials and labour, while food prices grew by 3.2%. Treasurer Jim Chalmers noted that high international oil prices have created serious difficulties for Australians.
Because inflation remains well above its 2.5% target, the Reserve Bank of Australia (RBA) may raise interest rates again at its next policy meeting on 3 November. The central bank's cash rate already stands at 4.6%, the highest level in 15 years. RBA Deputy Governor Andrew Hauser called the latest inflation figures "too high" and warned about the danger of price increases becoming stuck in the system.
If the central bank lifts rates next week, banks will likely raise loan charges, making home mortgages and other borrowing even more expensive. Economists warn that higher loan repayments could squeeze family budgets further at a time when household spending is already weakening.