Australia
Private Credit Weekly Insights, 2 May 2025
March Quarter CPI. A quick look at what is driving CPI figures in Australia
October Monthly CPI
Australian Economy Weekly Update — Week Ending 28 November 2025
This week’s release from the ABS showed headline inflation rising to 3.8% in the 12 months to October, up from 3.6% in September. The increase was broad-based, with the most significant contributors including housing (+5.9%), food and non-alcoholic beverages (+3.2%), and recreation and culture (+3.2%). Underlying inflation, as measured by the trimmed mean, also rose to 3.3%, from 3.2% the previous month.From a macroeconomic and monetary policy perspective, the 3.8% outcome, together with sticky core inflation, casts serious doubt on the possibility of further near-term rate cuts. With inflation running materially above the target band of 2-3% for both headline and underlying measures, the Reserve Bank of Australia (RBA) now seems likely to keep interest rates on hold for an extended period, if not pivot toward tightening. Several economists and major banks have already flagged a possible rate hike in 2026 rather than more cuts.
The broader outlook is turning toward a “higher-for-longer” interest-rate regime. According to the RBA’s November Statement on Monetary Policy, underlying inflation is expected to remain elevated through most of 2026, with headline inflation staying above 3% before gradually easing toward the midpoint of the target band by late 2027. That suggests borrowing costs may stay elevated, placing pressure on households and businesses.
Overall, the October CPI figures reinforce that inflationary pressures remain persistent. Both headline and core figures point to stickiness and now show little sign of returning to target quickly.
Source: Australian Bureau of Statistics, Consumer Price Index, Australia, October 2025