Australian CPI Data Keeps RBA Rate Hikes on Radar

Australia's Consumer Price Index (CPI) data for July 2026 has drawn attention to the country's inflation outlook, with annual headline inflation moderating from the previous month but remaining above market expectations.

The latest figures showed that Australia's CPI increased 1.0% month-over-month in July 2026, compared to a market expectation of 0.9%. On an annual basis, the CPI stood at 3.5%, down from 3.8% in June but above the 3.3% expectation.

The Trimmed Mean CPI, a key measure used to assess underlying inflationary pressures, increased 0.5% month-over-month, compared to an expectation of 0.4%. On an annual basis, trimmed mean inflation remained around 3.6%, unchanged from the previous month and above the Reserve Bank of Australia's (RBA) 2-3% inflation target.

The data suggests that underlying inflation may still require close monitoring by the RBA, as persistent price pressures can impact monetary policy decisions. Market expectations for a possible RBA rate increase in September increased following the inflation release, with the probability of a rate hike reportedly rising from 17% to 36%.