The Consumer Price Index (CPI) rose 4.9% in the 12 months to October primarily due to a rise in housing (+6.1%), transport (+5.9%) and food and non-alcoholic beverages (+5.3%) and insurance and financial services (+8.6%).
“The 4.9 per cent increase is down from 5.6 per cent in September and below the peak of 8.4 per cent in December 2022.” Leigh Merrington, Acting ABS head of prices statistics said.
New dwellings and rents
In the twelve months leading up to October, the cost of new homes increased by 4.7%.
However, the rate of this increase has been slowing down due to better availability of materials and less demand for new homes.
This annual growth in new home prices is the lowest since August of last year.
On the other hand, rental prices increased by 6.6% in the same twelve months, down from 7.6% in September. The fall in rents was due to the remaining impact of the changes to Commonwealth Rent Assistance.
In the twelve months leading up to October 2023, electricity prices increased by 10.1%, down from a rise of 18% in September. The annual movement was impacted by base effects, with the large monthly price rise in October 2022 no longer contributing to the October 2023 annual movement.
In July 2023, the Energy Bill Relief Fund launched rebates to lower electricity bills for concession households in Sydney, Adelaide, Hobart, Darwin, and Canberra and for all households in Brisbane and Perth.
From October 2023 newly eligible households received Energy Bill Relief Fund rebates in Sydney, Adelaide, Hobart, Darwin and Canberra. For Melbourne, rebates for newly eligible households will be reflected from November 2023.
The following graph shows the Electricity series, including and excluding government electricity rebates.
The decrease in the annual movement in October is largely due to base effects from the reinstatement of the full fuel excise tax from 30 September 2022. The end of the tax cut saw the excise rise from 22 cents per litre to 46 cents per litre, resulting in a monthly rise of 7.0% in Automotive fuel prices in October 2022. The rise in October 2022 no longer contributes to the annual movement for October 2023.
In monthly terms, Automotive fuel prices fell 2.9% in October, following a rise of 3.3% in September.
Inflation is critical in determining the pace and extent of interest rate changes by the Reserve Bank of Australia.
Why is the CPI being released monthly now?
The ABS began publishing a new monthly rolling series of CPI as inflation surged in 2022. The more comprehensive quarterly data set considers a broader range of items to calculate CPI.
The next release will be for November 2023 on 10 January 2024.