Annual living expenses for working Australians have reached an all-time high and record-high mortgage interest rates were mostly to blame, according to the latest data from the Australian Bureau of Statistics.

The report showed that all annual living cost indices have risen between 7.1% to 9.6%, exceeding the 7% annual rate of inflation.

ABS Head of Prices Statistics Michelle Marquardt noted that Living Cost Indices include the impact of mortgage interest rates, but the consumer price index does not as it measures the cost of building a new dwelling instead. As a result, the living cost for all household types rose more than the CPI, Marquardt said.

Living costs for employee households recorded the largest annual rise of all household types at 9.6%, which has not been seen since 1986, the report states.

“Employee households were particularly impacted by increases in mortgage interest charges, which are a larger proportion of their spending than for the other household types,” said Marquardt.

Mortgage interest rates rose by 78.9% year-on-year, which was up from a 61.3% annual rise in the December 2022 quarter.

On a quarterly basis, living costs for all household types increased between 1.3% to 2.2% in March 2023. All household types, except for self-funded retirees, experienced a quarterly increase in living costs higher than the CPI at 1.4%.