Opinion

The trend that will worry the RBA most about higher inflation

Sensing stronger consumer demand, businesses appear to be more confident about passing on higher costs, such as wages and electricity.

John KehoeEconomics editor

Oct 29, 2025 – 2.07pm

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The sharp jump in inflation in the September quarter will have caught the Reserve Bank of Australia by surprise, even though it was expecting a bit of a pick-up in price pressures.

It’s now likely to be a long wait over summer before RBA governor Michele Bullock and her nine-member monetary policy board can even contemplate whether they can further reduce the official 3.6 per cent cash rate next year.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.