Australia’s annual inflation charge accelerated to three.8% in October 2025, exceeding market expectations and complicating the Reserve Financial institution of Australia’s path towards additional financial easing.
The October studying marks an uptick from September’s 3.6% and a big beat on the three.5% consensus, with core inflation additionally climbing.
Key Takeaways
- Headline CPI: Rose 3.8% year-over-year in October, up from 3.6% in September and above the anticipated 3.7%
- Month-to-month inflation: Flat at 0.0% in authentic phrases however rose 0.3% on a seasonally adjusted foundation
- Core inflation (Trimmed imply): Elevated to three.3% yearly from 3.2% in September, exceeding the three.2% forecast
- Foremost drivers: Housing prices (+5.9%), significantly electrical energy costs (+37.1%), alongside meals and non-alcoholic drinks (+3.2%) and recreation and tradition (+3.2%)
- Items vs. Providers: Items inflation rose 3.8% yearly whereas providers inflation accelerated to three.9%, up from 3.5% in September
The October inflation surge was predominantly pushed by a considerable 37.1% annual improve in electrical energy prices, reflecting the advanced interaction of state and federal vitality rebate packages.
The timing of Commonwealth Power Invoice Aid Fund (EBRF) funds additionally contributed to the elevated annual determine. Excluding the assorted authorities rebate modifications, electrical energy costs would have risen a extra reasonable 5.0%, aligned with July’s annual value critiques.
Hyperlink to official ABS Shopper Worth Inflation October 2025 Report
As well as, lease progress accelerated to 4.2% yearly from 3.8% in September, although this partly displays low-impact from Commonwealth Lease Help in comparison with the prior yr interval. Stripping out CRA changes, underlying lease inflation was 4.5% yearly, exhibiting marginal deceleration from September’s 4.6%.
Meals and non-alcoholic beverage costs rose 3.2% yearly, unchanged from September and hovering across the 3.0% degree for the previous yr.
Meat and seafood costs jumped 3.8% year-over-year, with lamb and goat surging 14.6% and beef and veal climbing 10.5% amid robust abroad demand for Australian purple meat. Non-alcoholic drinks rose 4.8%, closely influenced by a 16.4% spike in espresso, tea, and cocoa costs attributable to constrained international espresso bean provide.
Market Reactions
Australian Greenback vs. Main Currencies: 5-min
Overlay of AUD vs. Main Currencies Chart by TradingView
The Australian greenback, which had already been cruising progressively larger for the reason that begin of the Asian session, confirmed further energy towards majority of its friends following the higher-than-expected inflation print.
The forex gained roughly 0.5% towards the U.S. greenback within the quick aftermath of the discharge, adopted by an honest 0.43% climb towards the Japanese yen and a 0.39% improve towards the Canadian greenback.
Its features have been capped and shortly erased towards the New Zealand greenback, nonetheless, because the forex took cues primarily from the RBNZ rate of interest resolution in the identical session.
