Key facts
- Australia's monthly consumer price index (CPI) rose 1.0% in July, exceeding the 0.8% forecast.
- The annual inflation rate slowed to 3.5% in July from 3.8%, below the 3.3% forecast.
- Core inflation, measured by the trimmed mean, increased by 0.5% in July, surpassing the 0.3% forecast.
- The annual pace of core inflation stands at 3.6%.
- The Reserve Bank of Australia has implemented three interest rate hikes this year to combat inflation.
Australian consumer prices increased more than anticipated in July, primarily due to rising fuel and travel expenses. The monthly consumer price index (CPI) recorded a 1.0% rise from June, surpassing the forecasted 0.8% increase. While the annual inflation rate slowed to 3.5% from 3.8%, this was still higher than the median forecast of 3.3%, as a significant increase from the previous year dropped out of the calculation.
Core inflation, as measured by the trimmed mean, also showed resilience, rising 0.5% in the month, which was well above the 0.3% expectation. This leaves the annual pace of core inflation at 3.6%. The Reserve Bank of Australia has been actively working to bring inflation back within its target band of 2% to 3%, having already implemented three interest rate hikes this year.