Inflation up to 3.8% as price pressures rise and hopes for Reserve Bank interest rate cuts fall

Inflation has climbed to 3.8% in the year to October, from 3.6% the month before, as Jim Chalmers flagged he could announce further energy bill subsidies for households in the upcoming midyear budget. Electricity prices were 37% higher in the year to October, which the Australian Bureau of Statistics said mostly reflected the end of state government power bill rebates. The ABS released its first “complete” monthly consumer price index, a milestone moment that will eventually see the more frequent inflation number supersede the quarterly figure. It confirmed an unwelcome upswing in price pressures that has crimped hopes for more Reserve Bank interest rate cuts, and even raised the potential the next move could be up. Sign up: AU Breaking News email Underlying inflation, which removes the impact of large, temporary price swings like in electricity prices, lifted from 3.2% in September to 3.3% in the year to October. With cost of living still the number one issue facing voters, Chalmers said before the release of the latest inflation numbers that the government would decide in “the next few weeks” whether to extend household energy bill rebates beyond the end of this year. The treasurer has perviously said there would be no major policy announcements in the midyear budget, due around 17 December, but in a Sky television interview opened the door to further electricity subsidies. With the Coalition using parliamentary question time to hammer the government on energy prices, Chalmers said “we’ve been very clear and very upfront for some time now – this electricity bill relief is really important”. “It is taking some of the edge off power prices for families and pensioners and people in our communities right around Australia.” He repeated his mantra that energy rebates “won’t be a permanent feature of the budget” but left the door open to extending the measures beyond December. “We’ll take a decision about that in the next few weeks.” The March budget extended the commonwealth’s energy bill relief fund for six months, which gave another $150 to all households and about 1 million small businesses, split into two quarterly instalments. The opposition leader, Sussan Ley, repeatedly dodged questions in a Wednesday morning interview over whether the Coalition supported extending the power bill subsidies. More details soon …