Australia Inflation Accelerates To 1-Year High

(RTTNews) - Australia's consumer price inflation accelerated more than expected to a one-year high in July, indicating a more gradual approach to monetary policy easing.

The CPI indicator advanced 2.8 percent year-on-year in July, following June's 1.9 percent rise, the Australian Bureau of Statistics reported. This was the strongest since July 2024, when inflation was 3.5 percent and also remained above economists' forecast of 2.3 percent.

Data showed that housing, food and non-alcoholic beverages and alcohol and tobacco prices provided the largest positive contribution to the annual inflation.

Reflecting increases in electricity costs, housing inflation rose to 3.6 percent from 1.6 percent. The annual increase in food and non-alcoholic beverages came in at 3.0 percent compared to 3.2 percent a month ago.

Excluding volatile items and holiday travel, inflation rose to 3.2 percent from 2.5 percent in June. Annual trimmed mean inflation was 2.7 percent in July, up from 2.1 percent in June.

Data came a day after the minutes of the Reserve Bank of Australia's board meeting held in August suggested that some further reduction in the cash rate over the coming year is likely and the pace of the future policy easing would be determined by the incoming data. At the August meeting, the policy board unanimously decided to trim the cash rate target by 25 basis points to 3.60 percent, which was the third reduction this year.