Final nail in the coffin for interest rate cut hopes as inflation rises again

Inflation has jumped once again, all but putting the final nail in the coffin for any chance of an interest rate cut in 2025.

While the monthly consumer price index (CPI) was flat in October, the yearly measure rose to 3.8 per cent, according to fresh data from the Australian Bureau of Statistics, up from 3.6 per cent in September.

The trimmed mean – the Reserve Bank of Australia's preferred measure of underlying inflation – also rose, albeit more gradually, up from 3.2 to 3.3 per cent.

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The headline figure is even higher than what was expected by economists, who had forecast a reading of 3.6 per cent, and is now well out of the RBA's target range 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 was expected and probably worse than even the most pessimistic people would have seen."

While monthly inflation data was previously less reliable, as it was only a CPI indicator rather than the full index, today marked the first time the ABS released a full monthly CPI, giving the figures more weight ahead of the RBA's final cash rate meeting of the year on December 9.

In what will come as little surprise to most Australians, housing costs were the main driver of price rises over the past year, with electricity and rental costs the main culprits.

More to come.

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