Australia’s inflation rises to 3.8% in October as housing pressures intensify

Australia’s consumer inflation picked up speed in October, rising faster than economists had anticipated and highlighting the growing pressure of housing and energy costs on households.

Data from the Australian Bureau of Statistics showed the Consumer Price Index increasing 3.8% year-on-year, its quickest pace since April and above the 3.6% forecast in a Reuters poll. The release also marked the ABS’s first full monthly CPI dataset, part of the government’s shift towards more frequent reporting of inflation trends.

Housing remained the strongest driver of the price surge, with costs climbing 5.9% over the year. Electricity prices jumped sharply, up 37.1%, as many households exhausted government rebates earlier in the year. Economists say the combination of higher power bills, record home prices, and limited housing supply is keeping inflation stickier than expected.

Food, non-alcoholic beverages, and recreation categories also posted annual increases of 3.2%, signalling that price pressures are broad-based rather than confined to a single sector. Underlying inflation, measured by the trimmed mean, edged up to 3.3%, slightly above September’s level.

Despite the annual rise, the monthly CPI was unchanged from September, defying predictions of a modest decline. Still, the overall picture suggests the central bank may need to hold its cautious stance for longer.

The Reserve Bank of Australia kept the cash rate at 3.6% earlier this month, noting that stronger consumer demand and a renewed upswing in the housing market are complicating the case for further easing. Governor Michele Bullock has already indicated that the current rate-cutting phase may be nearing its end, with inflation projected to remain above the 2–3% target range until late 2026.

Economists say October’s data reinforces the view that price pressures are proving more persistent than hoped, likely delaying any conversation about lower interest rates well into next year.