The Australian Chamber of Commerce and Industry (ACCI) has welcomed today’s release of the September quarter inflation figures describing them as “encouraging”.

Australia’s most connected and representative business network says the result is a further step towards bringing inflation under control and an opportunity to assist business.

ACCI chief executive officer Andrew McKellar says inflation needs to reduce to take pressure off interest rates which would give business much needed relief.

“The decline in underlying inflation is important but it must continue to come down to start getting the fundamentals in order,” said Mr McKellar.

“The easing in inflation is welcome for small businesses, struggling with rapid growth in the costs of inputs including energy, material and labour”.

Inflation eased to 0.2% for the quarter and 2.8% year-on-year.

In addition underlying inflation excluding volatile items such as energy and fuel, moved down to 3.5% in the year to September.

This paves the way for the next move in interest rates to be down – although the timing of this is still uncertain. It will also assist in moderating inflation expectations more broadly, taking pressure off businesses to raise prices.

The budgeted energy bill relief and other cost-of-living measures, combined with lower petrol, contributed to the lower inflation number.

The second round of the energy bill relief, saw electricity prices down 17.3% for the quarter and 15.8% for the year.

Automotive fuels were down 6.2% for the year to September due to lower global demand, although there is much uncertainty whether this will be sustained with the ongoing tensions in the Middle East.

However, higher prices for rents, insurance, healthcare and education continue to impact on household budgets.