Australia's inflation rate remained steady in October, with analysts tipping this price data won't change the Reserve Bank's mind to hold interest rates at their highest level in about a decade until at least early 2025.
The inflation rate held at 2.1 per cent annually, with the rising price of food, alcohol, cigarettes and recreational activities keeping it up, while subsidised electricity bills and lower petrol costs dragged it lower.
Yet overall, that pace of price increases is the lowest that Australia has experienced since before the post-COVID global inflationary shocks began, the Australian Bureau of Statistics (ABS) observed.
"(This) remains the lowest annual inflation since July 2021," ABS head of prices statistics Michelle Marquardt noted.
However, the measure of inflation that the Reserve Bank of Australia most closely watches when it sets interest rates rose in October to 3.5 per cent annually.
That is because this "trimmed mean" figure compiled by the ABS excluded the large disinflationary effect of falling fuel prices and electricity subsidies that brought down power bills.
"The falls in electricity and fuel had a significant impact on the annual CPI measure this month," Ms Marquardt says.
"When prices for some items move by large amounts (then) the trimmed mean can provide additional insights into how inflation is trending."
What are prices doing on everyday items?
While the annual rate of inflation held steady at 2.1 per cent in October, delving into the data shows there is still a mix of price shocks and significant drops.
Household electricity bills were down by more than a third in October, compared to one year previously, thanks mostly to rebates brought in by the federal government and topped up by some states.
"A key reason for that decline was the 12.3 per cent month-on-month plunge in electricity prices as some households received two instalments of the $300 Commonwealth rebate," analysis by Capital Economics' Marcel Thieliant said.
"In fact, electricity prices were down a whopping 35.6 per cent year-on-year in October, by far the largest decline in the history of the CPI."
Meanwhile, fruit and vegetables went up 8.5 per cent in price over the year to October.
"(This was) driven by lower supply of avocados, berries, and vegetables like cucumber and broccoli," the ABS' Ms Marquardt noted.
The ABS data comes out two weeks after the bureau noted its last release of inflation figures had "errors" in the way it calculated price rises on childcare costs.
A note this month said it had over-estimated "the impact of the Government's reforms to increase the rate of the Child Care Subsidy (CCS) and its eligibility parameters when they took effect in July 2023".
This led to a one-off reduction to the cost of childcare in the October figures.
What do the inflation numbers mean for interest rates?
The ABS figures for October are part of the bureau's relatively new series of monthly inflation data, which was brought into play as Australians and the world were experiencing inflationary shocks.
The monthly figures do not capture everything that ends up being included in the traditional quarterly figures, causing economists to be careful about how much should be extrapolated from them.
The RBA started rising interest rates from a historic low of 0.1 per cent in May 2022, to cool down the economy and try to bring down soaring inflation.
The cash rate is now at 4.35 per cent, its highest level in around a decade.
The RBA says it needs to be confident that "trimmed mean" inflation will settle between 2 and 3 per cent and remain there before it starts cutting interest rates, with that measure rising slightly last month to sit at 3.5 per cent.
Generally, most analysts are not expecting the October figures to change the RBA's stance on interest rates.
Current forecasts are generally predicting no rate cuts until next year, with a growing consensus building around a first cut in May.
"All told, today's monthly (inflation figures) suggests that price pressures are only moderating very slowly," Capital Economics' Mr Thieliant noted.
"And with the RBA arguing at its latest meeting that it would need to see more than one good quarterly CPI print to be confident that such a decline is sustainable, we're comfortable with our forecast that the bank will only cut interest rates in the second quarter of next year."
Some analysts still think a rate cut could come sooner.
"Roughly half of the reported subgroups posted outright price declines in October," JP Morgan's Tom Kennedy said in a note about the inflation data.
"(Which is) supporting our view that price pressures have eased significantly and that underlying inflation will continue to moderate.
"Given today's CPI indicator imparts some downside risk to our quarterly inflation forecast (0.7%q/q) we maintain our call for the RBA to cut 25bp in February."