RBA Interest Rate Hike Chances Plummet on Eased Inflation

The latest inflation figures from Australia show that inflation pressures have eased, making it less likely for the Reserve Bank of Australia (RBA) to raise interest rates in August.

The Australian Bureau of Statistics reported a consumer price index (CPI) rise of 3.8 per cent in the year to June, down from 4.0 per cent in May. The RBA's preferred measure of underlying inflation, the trimmed mean, remained steady at 3.6 per cent.

The release of these figures comes just a day after the RBA warned that inflation was still too high. Financial markets have cut the chances of a rate rise next month to near zero following the softer-than-expected inflation report.

RBA Governor Michele Bullock stated that the bank is 'prepared to act as required' to get inflation under control, including by increasing the cash rate further. She emphasized that the RBA assesses not only current inflation numbers but also the risks to inflation over the months ahead.