Australia’s inflation jumps to 3.8% in October

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Australia’s inflation picked up speed in October, rising 3.8% over the year — the fastest pace in seven months and higher than economists expected.

This is the first time the ABS has released a full monthly CPI, which will now replace the quarterly measure as the main indicator of inflation. Analysts noted the monthly data showed inflation running slightly hotter than earlier estimates.

Housing costs were the biggest driver, jumping 5.9%, fueled by rising electricity bills, higher rents, and new home prices. Electricity surged 37.1% in October as many households exhausted government rebates.

Food, drinks, recreation, and cultural expenses were also up 3.2% from a year earlier.

Underlying inflation, measured by the trimmed mean, rose to 3.3%, signalling persistent price pressures.

Month-to-month, inflation was flat — better than forecasts of a small decline.

The Reserve Bank of Australia held interest rates at 3.6% earlier this month, warning that inflation remains too high and could stay above its 2–3% target until late next year. Governor Michele Bullock said the current rate-cutting cycle may be nearing its end.

Economists now expect the RBA to push any discussion of easing into mid or late 2026, given the stronger inflation outlook.

Australia’s economy has been performing better than expected, expanding 1.8% in the second quarter, supported by solid household and government spending. New GDP figures will be released on December 3.

Markets reacted calmly:

• ASX 200 rose 0.73%

• The Australian dollar slipped to 0.6491 USD

• 10-year bond yields climbed to 4.474%

Source : cnbc

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