Australia's Inflation Eases to 3.4%, Supporting RBA Rate Hold

Australia's Consumer Price Index (CPI) for July is expected to show continued easing of inflation, according to market forecasts and economist projections. The Australian Bureau of Statistics will release the data on August 28, 2026, with a consensus pointing to a year-on-year increase of around 3.4%, down from 3.8% in June.

The moderation is driven largely by softer housing and energy costs, reinforcing the Reserve Bank of Australia's (RBA) cautious approach to interest rates. Analysts expect the cash rate to remain on hold at 4.10% in the near term, with a 70% probability of a rate cut by March 2027 priced in ASX 30-day interbank cash rate futures.

The easing inflation data provides relief to Australian households, who have faced elevated living costs over the past two years. If confirmed, it could pave the way for the RBA to begin normalizing monetary policy sooner than previously expected, leading to lower mortgage repayments and potentially boosting consumer confidence.