Inflation defies expectations to remain at lowest level in more than three years
Headline inflation has remained at its lowest level in more than three years, but the underlying figure is still proving difficult to get into the Reserve Bank's target range.
New monthly data from the Australian Bureau of Statistics has showed the consumer price index was at 2.1 per cent for October - the same as it was in September - and lower than what economists had been expecting.
The figure is lower than August's 2.7 per cent, and is the lowest level since July 2021.
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Headline inflation has remained at its lowest level in more than three years. Luis Enrique Ascui/The Age
Once again, energy rebates and falling fuel prices helped headline inflation stay at the lower end of the RBA's target range.
However, one of the key measures of underlying inflation – the trimmed mean – actually increased slightly to 3.5 per cent, still beyond the 2 to 3 per cent target.
"The falls in electricity and fuel had a significant impact on the annual CPI measure this month," ABS head of prices statistics Michelle Marquardt said.
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"When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding volatile items and holiday travel, and the trimmed mean can provide additional insights into how inflation is trending.
"Annual trimmed mean inflation was 3.5 per cent, up from 3.2 per cent in the previous month and similar to where it was in August."
Another measure of underlying inflation, however, dropped once again.
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"The CPI excluding volatile items and holiday travel was 2.4 per cent in the 12 months to October, down from 2.7 per cent in September," Marquardt said.
With the trimmed mean rising to its highest level since July, today's inflation data is highly unlikely to lead the Reserve Bank to cut interest rates in its final meeting of the year in a fortnight.
The RBA typically puts more weight on the quarterly figures, the next instalment of which isn't due until late January.
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