Underlying Inflation Remains Steady as RBA Prepares to Meet

Australia's underlying inflation rate has shown little sign of easing, according to the latest data from the Australian Bureau of Statistics. The Consumer Price Index (CPI) rose by 3.8 per cent in the 12 months to June 2026, down from 4.0 per cent in May. However, the Trimmed mean, the Reserve Bank of Australia's preferred measure of underlying inflation, remained unchanged at 3.6 per cent.

ABS head of price statistics Rachael McCririck explained that the Trimmed mean provides a clearer picture of inflation by looking through unusually large price movements. When excluding automotive fuel prices, which have been volatile due to the conflict in the Middle East, underlying inflation is steady at 3.6 per cent.

Market expectations were for a slight increase in the trimmed mean, but it remained stuck at 3.6 per cent. This has led economists to predict that the Reserve Bank of Australia will leave the cash rate unchanged at its August meeting.