Australia’s underlying inflation has risen faster than expected, with the Reserve Bank’s preferred “trimmed mean” measure climbing from 2.7 per cent to 3 per cent in September.
The RBA had anticipated a sharp rise in headline inflation as government electricity rebates expired, but it did not forecast underlying inflation to accelerate. Its projections had underlying inflation easing to 2.6 per cent by December.
Headline inflation jumped 1.3 per cent in the September quarter the steepest quarterly rise since March 2023.
Michelle Marquardt, head of prices statistics at the Australian Bureau of Statistics, said electricity costs were the largest contributor, rising 9 per cent in the quarter. Annual electricity price reviews that took effect in July 2025 pushed up costs across all capital cities, leading to a 23.6 per cent increase in electricity prices over the year to September as rebates in Queensland, Western Australia, and Tasmania expired.
The unexpected rise in underlying inflation highlights the pressure on households and complicates the RBA’s outlook, as it weighs how long higher prices will persist beyond temporary energy shocks.
SEO Tags: Australia inflation September 2025, RBA trimmed mean inflation, electricity price rise Australia, ABS inflation data, headline vs underlying inflation
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