Drop in inflation announced just a day after interest rates stay on hold
Decreasing automotive fuel and energy prices have been major contributors to a falling inflation rate, but the RBA is advising caution
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The rate of inflation has fallen to its lowest levels since August 2021, the Australian Bureau of Statistics revealed today. The news comes just a day after the Reserve Bank of Australia announced it would be keeping interest rates on hold at 4.35 percent.
The drop in the rate of inflation to 2.7 percent has been largely attributed to moderating prices of petrol and diesel, with automotive fuel 7.6 percent lower than a year ago, and electricity, which fell 17.9 percent over the same period.
Michelle Marquardt, head of Prices Statistics at Australian Bureau of Statistics, said the decrease in electricity prices was largely due to Commonwealth and State Government energy rebates in Queensland, Western Australia and Tasmania.
“Electricity fell 17.9 percent in the 12 months to August, which is the largest annual fall since the electricity series started in the early 1980s,” Ms Marquardt said. “Commonwealth Government and State Government rebates led to a 14.6 percent fall in electricity prices in the month of August, which followed a 6.4 percent fall in July.
“Excluding the rebates, electricity prices would have risen 0.1 percent in August and 0.9 per cent in July.”
The news was less positive for renters and those seeking to build or renovate, with rents up 6.8 percent over the past year and new dwelling prices also up by 5.1 percent.
Following a meeting of the RBA board yesterday, governor Michele Bullock announced that the cash rate would remain unchanged, citing persistently high inflation and economic uncertainties as major influences on the decision.
“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” Ms Bullock said in a statement. “But inflation is still some way above the midpoint of the 2–3 per cent target range.
“Headline inflation is expected to fall further temporarily, as a result of federal and state cost of living relief. However, our current forecasts do not see inflation returning sustainably to target until 2026. In year-ended terms, underlying inflation has been above the midpoint of the target for 11 consecutive quarters and has fallen very little over the past year.”
While the decision to keep rates on hold was widely anticipated, it has raised eyebrows in some quarters given the US Federal Reserve announced last week it was dropping the official cash rate by 50 basis points. However, research director at CoreLogic Asia Pacific, Tim Lawless, says there was good reason for keeping rates on hold in Australia for now.
“Importantly, Australia hasn’t gone ‘as hard’ on monetary policy as most other Western nations, increasing the cash rate by 425 basis points compared with a 525 basis point increase in the US and NZ, and a 515 basis point rise in the UK,” he said.
“Also, our tightening cycle has lagged most other nations, with the cash rate increasing from May 2022 compared with the US where the hiking cycle commenced in March 2022 or the UK where interest rates started rising in December 2021, or NZ and the EU which commenced rate hikes even earlier, in October and July 2021 respectively.”
Ms Bullock said the RBA board would be keeping a close on labour markets both here and overseas as it navigates a path to sustained lower inflation at the target rate of between 2 and 3 percent.
“Sustainably returning inflation to target within a reasonable timeframe remains the board’s highest priority,” she said. “This is consistent with the RBA’s mandate for price stability and full employment. To date, longer term inflation expectations have been consistent with the inflation target and it is important that this remain the case.
“While headline inflation will decline for a time, underlying inflation is more indicative of inflation momentum, and it remains too high.”
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With US$40 million already committed, the Global Talent Fund is attracting investor attention with a strategy focused on building globally scalable consumer brands alongside high-profile talent.
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A new investment fund targeting celebrity-founded consumer brands has secured US$40 million in commitments and is rapidly approaching its US$50 million fundraising target, signalling growing investor appetite for alternative opportunities beyond traditional asset classes.
The Global Talent Fund, which has a maximum raise of US$100 million, focuses on building and investing in consumer businesses alongside celebrities, athletes, and influential personalities who play an active role as co-founders rather than simply endorsing products.
The strategy is based on the belief that changes in consumer behaviour, particularly the rise of social media and digital engagement, have fundamentally altered how brands are built and scaled.
GTF founding partner Jeremy Hunt, who is helping lead the fund’s strategy, said consumers increasingly feel connected to personalities they follow online and are more willing to support products developed by those individuals.
“Consumers are searching for content to engage with, and when a celebrity they like or follow takes them on the journey of creating a product or brand, they genuinely feel part of that process,” he said.
The fund is targeting high-growth consumer sectors including wellness, hydration, beauty and recovery, areas Hunt believes continue to benefit from strong global demand and ongoing innovation.
Rather than backing celebrity endorsement deals, the fund is seeking businesses where talent is deeply involved in product development, brand creation and long-term growth.
According to Hunt, authenticity remains one of the biggest differentiators between successful celebrity-backed brands and those that fail.
“The consumer can see clearly if someone is simply being paid to promote a product,” he said. “The winners are typically the brands where the celebrity has genuinely helped build the business from the ground up.”
The model has attracted support from several prominent Australian investors and business families, reflecting broader interest in alternative investments with global growth potential.
Hunt said consumer brands offered a level of tangibility that many investors found appealing.
“Consumer brands are what we touch, feel, smell and taste every day,” he said. “Our investors understand the growth potential in the model, but they also want to be part of the journey.”
The fund’s rapid progress towards its fundraising target comes amid growing recognition that celebrity influence, when combined with strong commercial execution and scalable business models, can create significant enterprise value.
With several high-profile celebrity-founded businesses generating billion-dollar exits in recent years, supporters of the strategy believe the opportunity remains in its early stages.
For more information, contact marc@kanerbridge.com.au
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