Inflation falls to 6.9pc but ‘remains high’

INFLATION has slowed down but “remains high”, according to the latest ABS data on the consumer price index.

The monthly CPI indicator rose by 6.9 per cent in the 12 months to October, lower than the 7.3 per cent movement reported in September.

It is the sharpest fall in the CPI indicator since July 2021 when inflation was at 3.9 per cent. The most significant contributors to the CPI in October were new homes (+20.4 per cent), petrol prices (+11.8 per cent) and fresh produce prices (+9.4 per cent).

A surge in new home builds combined with the impact of labour and material shortages led to its significant contribution to overall inflation.

The federal government’s temporary cut to the fuel excise ended on September 29 and a fuel tax rate of 46 cents per litre was reinstated. As a result, fuel prices have risen, although the monthly movement was just 1.7 per cent since September.

Food and non-alcoholic beverage price rises eased over the last month from an annual rise of 9.6 per cent in September to 8.9 per cent in October.

In fruit and vegetables, improved growing conditions and an increase in supply helped the rate of increase in the price of produce fall from 17.4 per cent in September to 9.4 per cent in October.

Airfare prices eased as school holidays came to an end and demand for travel to Europe and America fell during the off-peak tourist season.

Holiday travel and accommodation price inflation also eased, from an annualised rise of 12.6 per cent in September to 3.7 per cent in October.