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Australia's Inflation Surges, Rate Cut Hopes Dwindle

10/29/2025

36 7 Full Breakdown

Summary

Story summary

In the September quarter, Australia’s inflation rose to 3.2% from 2.1% in June, driven by a 24% rise in electricity prices after subsidies ended.
The trimmed mean inflation rose to 3.0%, a key RBA measure.
This spike eliminates the likelihood of a November rate cut, with odds falling from 81% to 12%.
RBA Governor Michele Bullock said the central bank prioritizes inflation over unemployment, complicating policy decisions.

History

Historical Context

In 1975, Australia faced a severe inflation crisis, with rates reaching 17.0% due to oil price shocks and wage increases. Prime Minister Gough Whitlam's government struggled to stabilize the economy amid rising costs. Today, inflation at 3.2% highlights ongoing challenges in managing energy prices and economic policy, echoing the historical difficulties of the 1970s and the Reserve Bank's focus on inflation control.

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Story summary

In the September quarter, Australia’s inflation rose to 3.2% from 2.1% in June, driven by a 24% rise in electricity prices after subsidies ended.
The trimmed mean inflation rose to 3.0%, a key RBA measure.
This spike eliminates the likelihood of a November rate cut, with odds falling from 81% to 12%.
RBA Governor Michele Bullock said the central bank prioritizes inflation over unemployment, complicating policy decisions.

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