RBA Braces for Inflation Decision as Productivity Growth Looms Large

The Reserve Bank of Australia (RBA) is prepared to take action if inflation does not return sustainably to its target range, according to Governor Michele Bullock. The Australian Bureau of Statistics will release the latest Consumer Price Index data at 11:30am AEST today, which will be closely watched by economists and financial markets.

The RBA's preferred measure of underlying inflation, the trimmed mean, is currently running at 3.6 per cent, above the central bank's target range of 2 to 3 per cent. Headline annual inflation reached 4.0 per cent in the 12 months to May 2026.

Housing remains the largest contributor to inflation, rising 6.5 per cent over the year. Governor Bullock described Australia's weak productivity growth as the country's 'fundamental challenge' and warned that the economy is struggling to expand without creating additional inflationary pressure.