Cost of living: Inflation eases to 7 per cent

Although the inflation rate has eased, Aussies' budgets are still feeling the pinch.

Christmas grocery shopping and Australian money notes. Inflation concept.
Inflation rose 7 per cent annually in the March quarter, down from 7.8 per cent. (Source: Getty)

Australia’s inflation rate has fallen, with consumer prices rising 7 per cent over the year to the March quarter, down from 7.8 per cent in the December quarter.

The Consumer Price Index (CPI) rose 1.4 per cent in the March quarter and 7.0 per cent annually, according to the latest inflation data from the Australian Bureau of Statistics (ABS).

"CPI inflation slowed in the March quarter, with the quarterly rise being the lowest since December 2021. While prices continued to rise for most goods and services, many of these increases were smaller than they have been in recent quarters,” ABS head of prices statistics Michelle Marquardt said.

The biggest contributors to the quarterly increase were medical and hospital services (up 4.2 per cent), tertiary education (up 9.7 per cent), gas and other household fuels (up 14.3 per cent) and domestic holiday travel and accommodation (up 4.7 per cent).

Food prices also continued to rise (1.6 per cent), driven by higher fruit and vegetable prices (2.4 per cent) and snacks and confectionery (up 4.1 per cent).

Annually, the biggest contributors to the increase were new dwellings (up 12.7 per cent), domestic holiday travel and accommodation (up 25 per cent), and electricity (up 15.5 per cent).

Aussie budgets stretched

Aussie budgets are feeling the pinch from rising costs and all eyes will now be on the RBA when it meets next Tuesday.

New research by Mozo revealed three out of four mortgage-holders did not have a repayment buffer, while nearly a quarter were behind or only making interest repayments.

If the RBA decides to hike rates by 0.25 per cent in May, Mozo found this would add $92 to monthly repayments on a $600,000 home loan - a total of $14,196 in additional repayments since rate rises started in May 2022.

Aussie budgets are also being stretched by soaring electricity prices, with Compare the Market finding half of us are using our heating and cooling less to try to keep our bills down.

Meanwhile, research commissioned by No Meat May found more than half of Aussies were cutting back on their meat consumption as they looked for ways to save at the supermarket.

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