{"id":55251,"date":"2025-10-02T00:21:31","date_gmt":"2025-10-02T00:21:31","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/55251\/"},"modified":"2025-10-02T00:21:31","modified_gmt":"2025-10-02T00:21:31","slug":"rocketing-electricity-prices-and-the-cpi","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/55251\/","title":{"rendered":"Rocketing electricity prices and the CPI"},"content":{"rendered":"<p>Following the release of the monthly CPI for August, headlines about skyrocketing electricity prices began to circulate, highlighting the 24.6% year-on-year increase in electricity costs.<\/p>\n<p>While that is certainly true as measured by the CPI, the reality is quite a bit more complicated, and the headline rise in power prices is going to worsen significantly in the months to come.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/10\/Electricity-Australia-monthly-and-annual-movement-a.png\"\/><\/p>\n<p>Today\u2019s story kicks off in June 2023.<\/p>\n<p>Advertisement<\/p>\n<p>Without the impact of the Albanese government\u2019s Commonwealth Energy Bill Relief Fund (ERBF), July 2023 would have seen the cost of household electricity bills rise by 19%.<\/p>\n<p>Instead they rose by 6%, with the peak rise seen over the next 12 months at 9%.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/10\/CPI-electricity-index.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>The cost of electricity, as measured by the CPI, then plummeted due to a second round of ERBF subsidies for the 2024-25 financial year and additional state-based subsidies from the Queensland, WA, and Tasmanian governments.<\/p>\n<p>Advertisement<\/p>\n<p>Between June 2024 and October 2024, the measured cost of electricity fell by 35.2%.<\/p>\n<p>This huge fall in the cost of a key household staple played a major role in driving down headline inflation, helping to create conditions conducive to the Reserve Bank cutting interest rates.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/10\/All-groups-monthly-CPI-indicator-Australia-annual-movement-.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>Advertisement<\/p>\n<p>But now, as the various subsidies continue to unwind in the data, headline inflation is reaccelerating, and the rate of year-on-year electricity price inflation is expected to rise further.<\/p>\n<p>In September, the lack of subsidy payments will see electricity price inflation reaccelerate.<\/p>\n<p>But in October, the final Albanese government subsidy payment will once again see the rate of electricity price inflation fall.<\/p>\n<p>Advertisement<\/p>\n<p>Moving forward, it will take some time for the full impact of the various subsidies and the subsequent base effects to be fully reflected in the data.<\/p>\n<p>Ultimately, for the majority of the last two and a half years, the impact of electricity subsidies has been beneficial to headline inflation. Now as base effects take over, the impact for inflation will turn decidedly toward a hotter contribution to the CPI.<\/p>\n","protected":false},"excerpt":{"rendered":"Following the release of the monthly CPI for August, headlines about skyrocketing electricity prices began to circulate, highlighting&hellip;\n","protected":false},"author":2,"featured_media":55252,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-55251","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/55251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=55251"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/55251\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/55252"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=55251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=55251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=55251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}