![\"Labor](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/80880ca999ae28b116c70d04ee7039dd.jpeg\")
<\/p>\nLast year\u2019s three interest rate cuts were a \u201cmistake\u201d and the Reserve Bank of Australia \u201cfailed\u201d to bring inflation down, a top economist has said as price rises plague households.<\/p>\n
Data platform Trading Economics shows Australia has the equal second-highest trimmed mean inflation rate among all advanced economies.<\/p>\n
Australia\u2019s trimmed mean inflation rate of 3.6 per cent is equal to the Netherlands\u2019 rate, but remains below only Iceland\u2019s rate of 6.5 per cent.<\/p>\n
EQ Economics managing director Warren Hogan said the RBA\u2019s fight against inflation after the pandemic was ineffective.<\/p>\n
\u201cThis inflation is getting quite embedded now,\u201d Mr Hogan told Business Now.<\/p>\n
\u201cThe Reserve Bank has failed to hit their target all through these last few years.\u201d<\/p>\n
Pressed on whether the central bank\u2019s decision to lower the cash rate 75 basis points throughout 2025 was a \u201cmistake\u201d, Mr Hogan vehemently agreed.<\/p>\n
\u201cIt was,\u201d he said.<\/p>\n
\u201cThe RBA and others will argue that they did it on the base of the information they knew but they also had openly said they were running an experiment and never raised rates as much as other countries.<\/p>\n
\u201cI can’t see any argument for this not being anything but a disaster.\u201d<\/p>\n
Trimmed mean inflation examines the middle 70 per cent of price changes in the consumer price index and is central to the RBA\u2019s rates decisions.<\/p>\n
Many other nations hiked interest rates earlier and more aggressively than Australia when inflation soared following the pandemic.<\/p>\n
<\/p>\n
However, the lowest point the RBA managed to bring trimmed mean inflation down to after the pandemic was 2.8 per cent in June 2025.<\/p>\n
This is above the mid-point of the RBA\u2019s 2-3 per cent target band.<\/p>\n
Many similar economies saw their trimmed mean inflation rate fall within the RBA\u2019s 2-3 per cent target band.<\/p>\n
The United Kingdom\u2019s rate is currently 2.6 per cent, Germany\u2019s is 2.5 per cent, South Korea\u2019s is 2.4 per cent and the USA has a 2.9 per cent trimmed mean inflation rate.<\/p>\n
Mr Hogan said the recent slump in house prices and clearance rates may not be enough to bring down inflation as high public spending and the RBA acting late may enmesh price rises.<\/p>\n
![\"Excessive](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/50dcaae6255e1990a79ffdeb3ee29486.jpeg\")
<\/p>\n
\u201cI’m not sure that our inflation is going to be heading in the right direction anytime soon,\u201d he said.<\/p>\n
\u201cI’m sceptical whether or not the housing downturn is going to be enough to do that.<\/p>\n
\u201cSo we’re in a bind. It reflects the RBA not doing enough originally a couple of years ago and it also reflects the fact that the governments of Australia are not playing their role by moderating their spending, not cutting it, just not growing it as fast.\u201d<\/p>\n
The RBA has been forced to hike the cash rate three times this year, undoing the cuts of 2025.<\/p>\n