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yesterday

Australia’s July Inflation Jumps to 2.8%, Cutting Odds of a September RBA Move

Rebate timing lifted power bills, a quirk the RBA is likely to look through until quarterly data arrive.

A customer looks at products marked with discounted prices on display at a chemist in a shopping mall in central Sydney, Australia, July 25, 2018. REUTERS/David Gray/ File Photo
Women shop for clothes on a store in a shopping mall in Sydney's central business district (CBD) Australia, February 5, 2018. Picture taken February 5, 2018. REUTERS/Daniel Munoz/ File Photo
People carrying shopping bags make their way at a shopping mall in Tokyo, Japan October 21, 2022. REUTERS/Kim Kyung-Hoon/File Photo
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Overview

  • ABS data showed annual CPI at 2.8% in July versus 2.3% expected, with prices up 0.9% on the month.
  • Underlying inflation rose as the trimmed mean reached 2.7% from 2.1%, and the measure excluding volatile items and holiday travel hit 3.2%.
  • Electricity costs climbed about 13% year on year after NSW and ACT households missed July rebates that resume in August, adding roughly 0.3–0.4 percentage points to the headline rate.
  • Housing, holiday travel and select food and drink categories also pushed prices higher, with rents up 3.9% over the year and school-holiday travel lifting in July.
  • Markets lowered the probability of a September rate cut and now lean toward November, with the RBA emphasizing upcoming monthly prints and the October quarterly CPI before adjusting policy.