Australia’s annual inflation rate has risen to a three-decade high over the December quarter as soaring power and grocery bills squeezed families.
Australian Bureau of Statistics figures published on Wednesday revealed the annual consumer price index was up 7.8 per cent heading into 2023, increasing by 1.9 per cent in quarterly terms.
Fresh spikes in electricity prices drove the cost-of-living squeeze, with electricity bills up 8.6 per cent, while food and drink prices rose 9.2 per cent.
A significant spike in prices for local holiday travel and accomodation was also recorded, rising 13.3 per cent in the December holiday rush.
Annual inflation rose from 7.3 per cent in the September quarter and is now around the highest level since June 1990, the ABS data showed.
“This is the fourth consecutive quarter to show a rise greater than any seen since the introduction of the Goods and Services Tax in 2000,” the ABS’ head of prices statistics Michelle Marquardt said.
“The increase for the quarter was slightly higher than the quarterly movements for the September and June quarters last year (both 1.8 per cent).”
Economists had expected annual inflation would rise 7.5 per cent for the quarter, which was slated to represent a peak in the pace of price rises amid efforts from the Reserve Bank to contain inflation with higher rates.
The RBA hiked interest rates 3 percentage points last year in a bid to curb fast rising prices, but the full affects of the moves are yet to be felt.
Underlying (trimmed mean) inflation – a measure watched closely by the RBA because it strips out the most volatile price changes – rose 6.9 per cent annually over the December quarter, up from 6.1 per cent.
Those figures are more than double the RBA’s medium term inflation goal, which aims to target an inflation rate between 2 and 3 per cent.
