Australia's CPI Surprises with Unexpected 0.1% Drop, Fueling Rate Cut Speculation

Australia's Consumer Price Index (CPI) unexpectedly dropped by 0.1% in the second quarter of 2025, surpassing market expectations of a 0.7% rise.

This is the first quarterly decline in over two years and marks a significant disinflationary signal for the economy.

The drop was largely attributed to falling global oil prices and a cooling domestic housing market, which led to softer-than-expected increases in housing and utility prices.

The result places the annual inflation rate at approximately 2.8%, within the Reserve Bank of Australia's (RBA) target band of 2-3% for the first time since late 2021.