Today's inflation figures show that both CPI inflation and underlying inflation in the Australian economy have continued to moderate through the year, with underlying inflation easing to its lowest level since December 2005.
The Consumer Price Index (CPI) increased by 0.7 per cent in the September quarter 2010, to be 2.8 per cent through the year, down from 3.1 per cent in the June quarter.
In through-the-year terms, underlying inflation continued to moderate to 2.4 per cent, compared with 2.7 per cent in the June quarter. Underlying inflation was 0.5 per cent in the quarter, unchanged from the June quarter.
Despite the moderation in inflation over the year, we understand that households continue to face cost of living pressures.
Today's figures show that housing prices increased by 2.3 per cent in the September quarter, reflecting solid growth in rents and price increases in utilities and property charges. Household contents and services prices also increased 0.8 per cent in the quarter.
Alcohol and tobacco prices contributed 0.2 of a percentage point to inflation in the quarter, reflecting the residual impact of the April increase in excise and excise‑equivalent customs duty on tobacco products.
Helping to offset these price increases was a 0.6 per cent fall in transportation prices and a 0.5 per cent fall in food prices in the quarter.
Despite the lowest underlying inflation rate in almost five years, the Government is not complacent about emerging capacity constraints in the economy or the challenges posed by the mining boom.
We will continue investing in skills and infrastructure and reforming our economy so we can lift national productivity and build long term growth with low inflation into the future.
27 October 2010