Australia news LIVE: Inflation falls to lowest level in more than three years; voters back Dutton’s foreign investment property ban

Australia’s inflation rate has fallen to its lowest level in more than three years, paving the way for the Reserve Bank to deliver an interest rate cut in February.

The Australian Bureau of Statistics on Wednesday reported that through the final three months of 2024, consumer prices climbed by 0.2 per cent. This took the annual rate to 2.4 per cent, down from 2.8 per cent in the 12 months to the end of September.

It’s the lowest inflation result since the March quarter of 2021.

The closely watched measure of underlying inflation rose by 0.5 per cent in the quarter, the lowest rate since mid-2021. The annual underlying inflation rate dropped to 3.2 per cent.

The result was due partly to the federal government’s electricity subsidies, but prices for a range of other goods and services also eased. The cost of building new homes actually fell by 0.2 per cent in the quarter, taking the annual rate of growth down to 2.9 per cent. It peaked at almost 21 per cent in mid-2022.

Rents rose by 0.6 per cent in the quarter, after a 1.6 per cent climb in the September quarter. This took annual rent growth down to 6.4 per cent, driven in part by the federal government’s increase in Commonwealth Rent Assistance.

The result for the quarter is substantially lower than had been expected by the Reserve Bank, which holds its first meeting of the year on February 17 and 18.

The bureau’s head of prices statistics, Michelle Marquardt, said the 0.2 per cent quarterly increase, after a similar lift in the September quarter, was the lowest lift in inflation since the depths of the COVID pandemic.

She said non-discretionary inflation fell to 1.8 per cent while, for discretionary goods, it was 3.2 per cent.

“Non-discretionary inflation was lower than discretionary inflation for the first time in nearly four years,” she said.