Electricity prices 'account for living cost rise'

Inflation figures highlighted this week by opposition finance spokesman and acting shadow treasurer Andrew Robb indicate that daily essentials accounted for the biggest increases in living costs in Australia.

Electricity prices, for example, have risen by 60 per cent since 2007, when the Labor government came to power, he said.

Robb expressed worry that the newly-passed carbon tax has the potential to "drive power prices even higher", but added that more should be done in the near-term to support Australian homeowners, the AAP reports.

He remarked that the Reserve Bank of Australia's (RBA) job will be "difficult" when it meets on Melbourne Cup Day - sparking speculation that rates may be cut.

Robb explained: "Any reduction in interest rates next week would give some welcome relief to households feeling the strain of mortgage stress and the many businesses struggling in a two-speed economy."

The RBA has held cash rates steady at 4.75 per cent for 11 months straight, but new inflation figures published this week (October 26) have led to several industry insiders suggesting the possibility of a rate cut.

Commenting on October's decision to leave rates on hold, RBA governor Glenn Stevens remarked on ongoing "unsettled" conditions in global financial markets, explaining that recent turbulence in the American and European markets could have a knock-on effect in Australia.

Posted by Charlie Moore