Australia's Inflation Rate Eases, But Underlying Concerns Remain

Australia's inflation rate has shown signs of easing, but underlying inflation remains a concern for the Reserve Bank of Australia (RBA).

The Consumer Price Index (CPI) rose 3.5% for the 12 months to July, down from 3.8% in June, according to new figures from the Australian Bureau of Statistics (ABS).

Underlying inflation, which strips out very high or low prices, came in unchanged at 3.6% for the 12 months to July.

RBA Governor Michele Bullock has pointed to low productivity as a key driver of inflation, and the bank's executives have warned that Australia's issues are domestic, existing before the outbreak of the Iran War in February.

The RBA hasn't ruled out further rate hikes for the year, but is sending a clear message that its triple tightening earlier in 2026 is working well to stabilise domestic inflation pressures.