Australia's CPI Rises 2.1% In October, Below Market Projections

The Australian Bureau of Statistics (ABS) revealed Wednesday that the country's consumer price inflation rate remained at a three-year low in October due to the government slashing electricity and rent prices.

The monthly consumer price index (CPI) increased 2.1% in the 12 months to October 2024. A more steady inflation environment was shown by the fact that this increase fell short of the 2.3% market projection, per the ABS statement.

The trimmed mean, or in other words, the underlying inflation rate, reached 3.5%. It was 3.2% in September. Because of its volatility, the report might not significantly influence monetary policy, Reuters reported.

Consumers heaped a sign of relief after the electricity rates dropped 35.6% from the same period last year. The record-breaking decline was accompanied by a notable 11.5% drop in transport fuel prices as a result of a decline in Middle East tensions and a dip in Chinese demand, which in turn led to a drop in world oil prices, the Guardian reported.

With only a 14% possibility of a cut in December, the market anticipates that interest rate cuts will be postponed until May of the following year.

The Australian dollar held firm at $0.6474 after the inflation data was released, and three-year bond futures maintained their gains, climbing to 96.02.

For the past year, the Reserve Bank of Australia has kept interest rates at 4.35% because it thinks this rate will be enough to keep inflation under control and continue job growth.