Australia's July CPI Preview: Headline Inflation Expected to Fall Sharply
Australia's Bureau of Statistics is set to release its July monthly Consumer Price Index (CPI) today at 11:30am AEST, and economists are closely watching the numbers.
The headline inflation rate is expected to fall sharply to between 3.2% and 3.3%, down from June's 3.8%. The drop is largely due to a 1.3% price rise from July last year dropping out of the annual calculation, rather than a genuine acceleration in disinflation.
The more closely watched trimmed mean, which strips out volatile items, is expected to ease modestly to around 3.5%, down from 3.6% in June. Westpac forecasts the trimmed mean will still rise 0.4% on a month-on-month basis, slightly above the Reserve Bank of Australia's (RBA) own projection track.
The release comes just over two weeks after the RBA held its cash rate at 4.35%. A softer trimmed mean reading would strengthen the case for an extended hold by the RBA in September, while any upside surprise risks reopening debate about further tightening.