Inflation spike sends warning signs as electricity bills surge

A sharp rise in electricity bills

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Australia’s inflation rate has surged to its highest point in a year, with the Australian Bureau of Statistics reporting a 24.6% annual rise in household electricity bills. The end of state and federal government electricity rebates meant many households and businesses suddenly faced the full brunt of energy costs.

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The impact on households

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For households, the pain is immediate. Families in Queensland, Western Australia and Tasmania, where rebates were most generous, are now dealing with bill shock as subsidies disappear.

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What small businesses are facing

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For SMEs, already managing tight margins, the increase in electricity prices adds another layer of pressure. Cafés, retailers, and local operators who rely heavily on electricity for daily operations face higher operating costs that directly hit profitability.

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Commercial and Industrial businesses

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Large Commercial and Industrial (C&I) businesses aren’t immune either. Volatile electricity prices affect procurement strategies, risk exposure, and long-term contract negotiations. Economists warn that these higher energy costs are feeding back into broader inflationary pressures, raising doubts about whether the Reserve Bank of Australia will deliver further rate cuts this year.

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The RBA’s response

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Financial markets have already reacted, lowering the odds of a near-term rate cut. Analysts at Citi, Deutsche Bank, and Barrenjoey noted that the August inflation data is a clear warning sign for the RBA. Some now believe the current easing cycle could be over, leaving businesses and households to weather a longer period of high borrowing costs.

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Underlying inflation remains stable

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While the RBA looks at underlying inflation measures, which remain close to target, the immediate pressure from electricity bills is undeniable. For businesses of all sizes, this means higher input costs, tighter cash flow, and uncertainty about future energy pricing.

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How Zembl can help

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At Zembl, we know energy is one of the biggest cost lines for households, SMEs, and large businesses. We cut through the market complexity to help you find more competitive energy deals, manage procurement risk, and explore smarter solutions like renewable options and efficiency strategies. Whether you’re a café owner or managing a national operation, Zembl puts you back in control of your energy costs, even when the market isn’t.