The latest figures released from the Reserve Bank of Australia showed a significant slowdown in Australia’s inflation rate over the last few months of the previous year, with consumer prices rising just 0.6% over the December quarter and 4.1% over the past year, marking the smallest quarterly rise since March 2021. This decline in inflation, from a peak of 7.8% a year ago, has led to speculation that the Reserve Bank of Australia (RBA) will keep interest rates on hold during its next meeting. The quarterly inflation rate halved from September’s 1.2%, and the official data was below the expectations of economists, who had predicted a quarterly reading of 0.8% and an annual reading of 4.3%. Financial markets are now pricing in at least one rate cut by August and at least two by the end of the year. 

The struggles of everyday Australians with cost-of-living pressures are well known with the challenges of rising rental prices, construction costs, insurance premium, electricity and essential goods. Many pulled forward their Christmas shopping to take advantage of Black Friday sales 

and also cut back expenditure where they can to make ends meet. With the government’s senate enquiry into the power of Coles & Woolworths in the grocery industry, both retailers will be under pressure to pass on lower costs to customers, and more scrutiny will be applied to their profit margins and price gouging. This should result in lower prices which will be welcomed relief for many families and hopefully continue the trend of falling inflation. Fresh produce prices went backwards in September quarter due to more favourable growing conditions.