This returned starkly above the general 0.8 per cent market consensus and the RBA’s 0.6 per cent forecast.

Australia’s inflation appears to have re-accelerated, with core inflation rising to 3.0 per cent (the first annual increase since 2022) and headline inflation lifting 1.3 per cent for the quarter and 3.2 per cent over the year.

Economists said the surprise result has wiped out market hopes of a 2025 rate cut, pushing expectations for easing into mid-2026 and raising the risk of another hike if price pressures worsen.

Judo Bank economists noted the chance of a rate cut today collapsed to near zero, while the Commonwealth Bank and ANZ now expect the Reserve Bank to hold rates for longer, adopt a more hawkish tone and revise inflation forecasts higher.

CBA and ANZ said consumption and housing activity have been stronger than expected, and the labour market remains “a little tight,” limiting scope for easing.

VanEck and Betashares warned that surging energy costs and sticky services inflation are key drivers of the price rebound, with energy bills climbing sharply despite rebates.

Betashares added that policy failures have worsened energy market volatility.

With inflation persistence and firm spending momentum, most economists now see little chance of cuts in 2025 – and a slim risk the RBA may need to tighten further, even as the US Federal Reserve continues cutting rates.