Inflation rose by 2.1% in the year to October 2024, according to new figures from the Australian Bureau of Statistics (ABS).
The annual inflation figure is the same as the last month, which was the lowest inflation rate since July 2021.
Inflation in October 2024
Inflation measures price growth. When inflation is high, your money buys less.
The latest ABS figures show prices increased by 2.1% from October 2023 to October 2024. This means everyday goods and services cost 2.1% more in October than they did a year ago.
Despite some fluctuation, the rate of inflation has been gradually trending down from a peak in December 2022.
The price of alcohol and tobacco rose by 6%, while the price of food and non-alcoholic beverages rose by 3.3%.
The biggest fall in prices was electricity, which dropped 35.6% from 2023 to 2024. This is the largest annual fall in the price of electricity since records began. According to the ABS, this fall was driven by government discounts on energy bills.
Cash rate
Inflation is a key factor used by the Reserve Bank of Australia (RBA) to decide the cash rate.
The cash rate is what the RBA charges banks for short-term loans, which affects interest rates all over the economy, including home loans. The cash rate has been at 4.35% since November last year, which is its highest level in about a decade.
The RBA aims for annual inflation to be between 2-3%. Inflation is currently within that range, but this does not guarantee that the cash rate will change soon.
