Economic News

When Governor Michele Bullock listed what is pushing prices up, she named three forces side by side: the Middle East conflict, the artificial intelligence boom and extreme weather.

Inflation fell from 7.9 per cent at the end of 2022 into the Reserve Bank's target range for a time in 2024 and 2025, but by the RBA's own account both headline and underlying measures have since moved back above 3½ per cent.

The next consumer price index update lands on 28 October, six days before the Reserve Bank's November decision, and it arrives with inflation still well above target.

Tucked inside the Reserve Bank's 29 September decision was a 15-word sentence that helps explain why the Board moved: higher fuel prices are no longer staying at the bowser.

Deputy Governor Andrew Hauser's description of how far prices have overshot offers one of the clearest explanations of why the cost-of-living squeeze still feels so sharp.

The Reserve Bank's August forecasts mapped out a long, gradual descent for underlying inflation, and the path has been tested since by higher energy prices and a fourth rate rise.

The Reserve Bank's August forecasts had the economy growing by just 1.4 per cent over 2026, a deliberately modest pace that sits at the centre of its plan to bring inflation down.