Today’s monthly CPI data showed positive signs that monetary policy is taming the inflation beast. Excluding volatile items (fruit and vegetables and fuel), monthly CPI reduced to 5.1 per cent, down from 5.5 per cent the previous two months.

Seasonally adjusted CPI fell below the five per cent barrier, to 4.8 per cent, for the first time since February 2022.

Food and non-alcoholic inflation increased slightly, from 4.7 per cent to 5.3 per cent in October due to slight increases in fruit and vegetable and meat and seafood inflation. Housing inflation is running at 6.1 per cent, still one of the highest contributors of the inflation categories, but also falling from 7.2 per cent the previous month due to Commonwealth Rent Assistance packages.

This monthly CPI release, combined with weak consumer spending and rising numbers of unemployed people, means the RBA will almost certainly hold the cash rate steady at the December meeting.

This is good news for retailers and summer holiday makers, though consumers are likely to be wary of the fact that interest rates are likely to stay high until at least Q3 2024.