Inflation up to 3.8% as price pressures rise and hopes for interest rate cuts fall | Australian economy

Inflation rose to 3.8% in October, from 3.6% in the previous month, as Jim Chalmers stated that he may announce more energy bill subsidies for households in the upcoming mid-year budget.

Electricity prices were 37% higher through October; The Australian Bureau of Statistics said this mostly reflected the end of state government electricity bill discounts.

ABS publishes first “full” monthly consumer price index; This is a turning point that will eventually see more frequent inflation figures replace quarterly figures.

It confirmed that the unintended rise in price pressures had dashed hopes of further interest rate cuts by the Central Bank, and even raised the potential that the next move could be up.

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Core inflation, which strips out the impact of large, temporary price fluctuations such as those in electricity prices, rose to 3.3% in October from 3.2% in September.

With the cost of living still the number one issue facing voters, Chalmers said the government would decide in the “next few weeks” whether to extend household energy bill cuts until the end of this year, before the latest inflation figures are released.

The treasurer had previously said there would be no major policy announcements in the mid-year budget, which is due around December 17, but opened the door to more electricity subsidies in an interview on Sky television.

“We’ve been very clear for a while now; this reduction in the electricity bill is really important,” Chalmers said, as the coalition used parliamentary question time to pressure the government on energy prices.

“It removes some of the advantage in electricity prices for families, retirees and people in our communities across Australia.”

He repeated the mantra that energy cuts “will not be a permanent feature of the budget” but left the door open for the measures to be extended beyond December.

“We will make a decision on this within the next few weeks.”

The March budget extended the state’s energy bill relief fund for six months; This fund provided an additional $150 to all households and nearly 1 million small businesses, divided into two quarterly installments.

Opposition leader Sussan Ley repeatedly dodged questions about whether the Coalition supported extending electricity bill subsidies in an interview on Wednesday morning.

More details coming soon…