Australia's inflation rate is at its lowest level since before price shocks began in 2021. It's mainly because of energy subsidies and falling fuel prices. But economists say the chances of an interest rate cut in the next few months are looking unlikely.
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00:00Buying food is a lot more expensive than it used to be.
00:06It's also tough for businesses making it.
00:09The boss of this firm says he's unable to pass on most of his cost increases to customers
00:14because of how competitive the industry is.
00:17They may accept a different quality, they may accept a slightly smaller size, but ultimately
00:21they're not prepared to pay more than a certain price.
00:23In the year to October, inflation remained steady at 2.1%, driven by food prices, in
00:30particular fruit and veg, up 8.5%.
00:34Rents rose 6.7%, but would have been higher without rent assistance.
00:39But fuel prices fell almost 12%, and electricity prices tumbled nearly 36% thanks to energy
00:47rebates.
00:48Unfortunately, underlying inflation, which ignores some of the more extreme price changes,
00:54rose to 3.5%.
00:56We have made very substantial, very welcome, very encouraging progress in this fight against
01:02inflation.
01:03And the fight against inflation has been this government's number one priority.
01:07Standards of living in Australia have been in freefall, they have collapsed.
01:11So even though inflation is overall on the way down, it's still tough for a lot of households.
01:16According to analysis from AMP, prices at the shops have jumped 20% over the past five
01:21years, while wages have only risen 13%.
01:25So living standards have gone backwards.
01:27Economists say the odds of the Reserve Bank cutting interest rates any time soon are unlikely.
01:33We do think the decision for a February rate cut is still a coin toss at the moment.
01:38There is a very high risk that they might have to delay it until May.
01:43Any relief would be welcome by anyone who needs to eat.