In recent months, there seemed good reason to believe inflation had been brought back under control and that interest rates would continue to fall, further boosting consumer confidence.

Many retailers were hoping for a strong Christmas shopping season.

Unfortunately, Australian households are being squeezed again, with the latest inflation figures showing significant price rises for streaming subscriptions, phone plans, restaurant meals and car repairs.

As Channel News has reported, the streaming platforms have implemented significant price rises in recent months.

It seems they aren’t the only ones to have done so, with the AFR reporting that audio, visual and media services inflation has hit 9.4 per cent, in annual terms.

Telco bills are also climbing, with phone and internet plans up 1.8 per cent year-on-year.

These increases are feeding into services-sector inflation

The (trimmed-mean annual) rate of inflation for September is now predicted to come in at around 2.8%.

That’s within the RBA’s 2-3% target, but still on the worringly high side.

For financially stretched households, the timing of the latest news is poor.

Surging costs in some categories mean many consumers are still struggling financially

With the holiday season approaching, many Australians had been hoping for another interest rate cut and lower mortgage repayments before the end of the year.

However, the latest CPI data has prompted major banks to revise their predictions for further cuts in 2025.

Financial markets have pared back the odds of a further interest rate cut in November.

NAB is forecasting that there won’t be another rate cut until May 2026.

The more bearish analysts are warning that the easing cycle may already be over.

That means consumer confidence, which had been showing encouraging signs of rebounding,  is likely to take a hit.

Retailers, who had been banking on a late-year rebound, now face the prospect of subdued spending as they head into the critical Christmas trading period.

Elevated grocery bills, volatile fuel prices, and ongoing rent pressures are eroding disposable income.

The spike in services inflation suggests that businesses either feel confident in passing on higher costs or now have no other option.

For tech and electronics retailers, streaming hikes and pricier telco bundles are a mixed blessing.

They highlight continued consumer demand for these services, but also risk crowding out other discretionary spending.

Households forced to juggle rising streamer and mobile bills may cut back on new devices, home entertainment gear and non-essential tech purchases.