Inflation rises above expectations as housing costs continue climbing
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Australia’s inflation rate eased in July but remained higher than economists expected, adding pressure on the Reserve Bank of Australia.
New data from the Australian Bureau of Statistics showed annual inflation fell to 3.5 per cent, down from 3.8 per cent in June.
However, the RBA’s preferred measure, trimmed mean inflation, remained at 3.6 per cent for the second consecutive month. It is now at its highest level since September 2024 and remains above the RBA’s 2–3 per cent target range.
Housing was the biggest contributor, with prices rising 5 per cent over the year. Food and non-alcoholic beverages increased 3.2 per cent.
The ABS said new dwelling prices rose 5.7 per cent, as higher material and labour costs continued to push up construction expenses.
The figures were stronger than expected. Economists had forecast headline inflation to fall to around 3.3 per cent, while trimmed mean inflation was expected to ease to 3.5 per cent.
Financial markets have since slightly increased expectations of another interest rate rise. The probability of a September hike rose from 17 per cent to 20 per cent following the inflation release.
Economists warned that the latest figures show Australia’s inflation problem remains unresolved.
With underlying inflation still above target, households could face continued pressure from higher prices and the possibility of further interest rate increases.
Stay tuned with Aus News Lanka – the leading platform for news for Australians.
Source : News 24
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