Inflation cooled more than forecast over the 12 months to July, as fuel and fruit and vegetable prices fell, while housing costs continued to rise.
The Australian Bureau of Statistics (ABS) monthly index shows consumer prices easing to an annual pace of 4.9 per cent last month, down sharply from 5.4 per cent in June.
It is also well below the closely-watched quarterly consumer price index, which pulled back to a 6 per cent annual increase in the June quarter.
Economists polled by Reuters had tipped inflation to slow to 5.2 per cent, although the forecasts ranged from 4.7 per cent to 5.9 per cent.
“Annual price rises continue to ease from the peak of 8.4 per cent in December 2022,” ABS head of prices statistics Michelle Marquardt said.
The inflation update comes ahead of the Reserve Bank’s September board meeting on Tuesday, the final under outgoing governor Philip Lowe, who will be replaced by his deputy Michele Bullock mid-next month.
However, the RBA plays closer attention to the ABS quarterly inflation figures, next due out in October.
The central bank expects headline inflation to slow sharply, to 4.1 per cent by the December quarter this year, with its preferred measure of underlying inflation forecast to return to its 2 to 3 per cent target band by mid-2025.
