By Editor,Sarah Brookes
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Brutal cost-of-living sign interest rate cuts will be DELAYED for millions of Aussies
Cost of goods continues to rise
READ MORE: Reserve Bank boss issues a price shock warning to Australians
By SARAH BROOKES – SENIOR REPORTER, AUSTRALIA
Published: 03:08 BST, 24 September 2025 | Updated: 03:46 BST, 24 September 2025
Millions of Australians with a mortgage could be forced to wait longer for more interest rate relief, with inflation higher than expected.
The Australian Bureau of Statistics (ABS) revealed on Wednesday the annual CPI inflation rate rose three per cent in the 12 months to August.
ABS head of prices statistics Michelle Marquardt said that figure was up from 2.8 per cent to July, making it the highest annual inflation rate since July 2024.
The largest contributors to annual inflation were housing (+4.5 per cent), food and non-alcoholic beverages (+3.0 per cent), and alcohol and tobacco (+6.0 per cent).
Electricity costs rose 24.6 per cent in the 12 months to August after electricity rebate programs offered by some states ended.
‘The annual rise in electricity costs is primarily related to households in Queensland, Western Australia and Tasmania having higher out-of-pocket costs in August 2025 than they did in August 2024,’ Ms Marquardt said.
In August last year, state government electricity rebates were in place for Queensland ($1000), Western Australia ($400) and Tasmania ($250).
The latest reading means a spring rate cut is slipping further away for mortgage holders and, with cost-of-living pressures still running hot, households may be forced to wait until well into 2026 for relief, according to Canstar.
Reserve Bank of Australia (RBA) Governor Michele Bullock (pictured) speaks to media during a press conference
‘Today’s CPI results are unlikely to move the needle for the Reserve Bank Board when it meets next Monday and Tuesday,’ said Canstar data insights director Sally Tindall.
‘While the monthly data can be a helpful indicator as to what’s happening with prices, it doesn’t yet measure a full basket of goods each month and, as a result, can be volatile.
‘Heading into next week’s RBA decision, a rate cut seems highly unlikely.’
RBA governor Michele Bullock addressed the House of Representatives Standing Committee on Economics this week and said while inflation has fallen materially, the price level isn’t coming back down.
‘The higher price level has affected everyone – whether you’re paying a mortgage, renting, running a business or just trying to make ends meet,’ she said.
‘It’s been especially tough on people with lower incomes and those in more vulnerable situations.’
It comes after RBA assistant governor Sarah Hunter said last week that prices would never return to pre-pandemic levels.
‘The cost of living is now higher and we are not trying to bring the price level down,’ she said.
Australia’s latest monthly inflation reading has exceeded expectations, raising concerns relief for mortgage holders could be pushed back
‘My personal price point on this is the milk I get in the supermarket every week, which is an awful lot more expensive than what it was pre-Covid.
‘The price of milk will not go back to where it was pre-Covid, same with bread, other staples, petrol and so on.’
The RBA meets next to decide on interest rates on September 30. The cash rate is currently 3.6 per cent.
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Brutal cost-of-living sign interest rate cuts will be DELAYED for millions of Aussies
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