Inflation falls to 6.8%: Here’s what is costing the most

The monthly Consumer Price Index (CPI) rose 6.8 per cent for the year to February, according to the latest inflation data from the Australian Bureau of Statistics (ABS).

That means inflation has fallen for the second month in a row, down from the 7.4 per cent increase reported in January.

“This marks the second consecutive month of lower annual inflation, also known as ‘disinflation’, from the peak of 8.4 per cent in December 2022,” ABS head of prices statistics Michelle Marquardt said.

• Also read: Cost of living crisis: What happens next

• Also read: Inflation still rising but there is good news for 2023

• Also read: $3k per month: Aussies using side hustles to fight the rising cost of living

The biggest contributors to the increase were housing (up 9.9 per cent), food and non-alcoholic beverages (up 8 per cent), transport (up 5.6 per cent) and recreation and culture (up 6.4 per cent).

“New dwellings grew 13.0 per cent in the 12 months to February which is the lowest annual growth since February 2022 as price rises for building materials continue to ease,” Marquardt said.

“Rent prices rose again due to the tight rental market, maintaining the 4.8 per cent annual growth recorded in January.”

For food and beverages, the biggest driver of the price increases were meals and takeaway food (up 7.3 per cent). Bread and cereal (up 12.5 per cent) and dairy and related products (up 14.3 per cent) also increased.

While fuel prices drove up the increase to transport costs, the ABS noted that the annual increase for fuel was the lowest it has been in two years.

Meanwhile, recreation and culture prices moderated following the December and January travel period.

"Since rising 29.3 per cent in the 12 months to December, price rises for Holiday travel and accommodation have eased to 14.9 per cent in the 12 months to February,” Marquardt said.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.