{"id":573365,"date":"2026-07-29T06:53:21","date_gmt":"2026-07-29T06:53:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/573365\/"},"modified":"2026-07-29T06:53:21","modified_gmt":"2026-07-29T06:53:21","slug":"dodged-a-bullet-inflation-eases-to-3-8-reducing-chances-of-interest-rate-rise-for-australias-mortgage-holders-australian-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/573365\/","title":{"rendered":"\u2018Dodged a bullet\u2019: inflation eases to 3.8%, reducing chances of interest rate rise for Australia\u2019s mortgage holders | Australian economy"},"content":{"rendered":"

Australian mortgage-holders have \u201cdodged a bullet\u2019, with the Reserve Bank now less likely to hike rates next month after new data showed inflation unexpectedly eased to 3.8%, in the year to June, from 4%.<\/p>\n

The hotly anticipated consumer price report from the Australian Bureau of Statistics had been seen by some economists as a \u201cmake-or-break\u201d moment ahead of the RBA\u2019s interest rate decision on 11 August.<\/p>\n

Crucially, the ABS data showed underlying price pressures \u2013 while still too high \u2013 eased by more than anticipated through the June quarter. The RBA\u2019s preferred measure that trims out the most volatile prices came in at a softer than anticipated 0.8% through the three months.<\/p>\n

Sign up for the Breaking News Australia email<\/a><\/p>\n

That lifted the annual pace to 3.6%, from 3.5% \u2013 still far higher than the central bank\u2019s official target of 2.5%, but below the RBA\u2019s last forecast for 3.8% by the middle of the year.<\/p>\n

Chris Richardson, an independent economist, declared: \u201cBullet now officially dodged.\u201d<\/p>\n

\u201cThere\u2019s been growing evidence the RBA\u2019s rate hikes were starting to work in the fight against inflation, and that the Middle East war hadn\u2019t been as bad for inflation (or the economy) as earlier feared,\u201d Richardson said.<\/p>\n

That said, the \u201cfight against inflation hasn\u2019t been won yet\u201d.<\/p>\n

\u201cBut, for now, it looks as if the RBA won\u2019t be raising rates on 11 August.\u201d<\/p>\n

Wednesday\u2019s consumer price report triggered a major re-think in financial markets, where the implied probability of a move next month plunged to 4%, from more than 20% at the start of the day, according to Bloomberg data.<\/p>\n

The chance of a fourth rate hike this year also dropped to below 50%, from 84%.<\/p>\n

For everyday Australians, falling fuel prices helped lower the headline rate of inflation in the month of June \u2013 a trend that will reverse in July after the restart of the Iran war and the upcoming expiry of the government\u2019s 16-cent fuel excise discount.<\/p>\n

Rachael McCririck, ABS head of prices statistics, said \u201clower world oil prices as a result of some stabilisation in the Middle East in June contributed to fuel prices falling 10.9% in the month\u201d of June.<\/p>\n

But there was plenty of evidence of ongoing price pressures. Home building costs, for example, climbed at the fastest pace in three years, at an annual pace of 5.8%.<\/p>\n

skip past newsletter promotion<\/a>Free newsletter | When needed<\/p>\n

Sign up to Breaking News Australia<\/p>\n

Get the most important news as it breaks<\/p>\n

\"\"<\/p>\n

\u201cThis was driven by builders passing on higher material and labour costs,\u201d McCririck said.<\/p>\n

With rents climbing by 3.6% in the year to June, the treasurer, Jim Chalmers, told journalists in Brisbane that \u201cwe know that people are still under pressure\u201d.<\/p>\n

\u201cWe know that inflation is still higher than we would like it to be,\u201d he said.<\/p>\n

\u201cWe know that the war in the Middle East and the uncertain developments, even in the last couple of weeks, risks that outlook as well. But in the circumstances that we find ourselves in, these numbers today are encouraging.\u201d<\/p>\n

Despite cost-of-living pressures, the ABS said increased overseas travel and higher jet fuel costs helped lift hotel and accommodation prices by 4.6%.<\/p>\n

Stephen Smith, a partner at Deloitte Access Economics, said \u201chouseholds and businesses will breathe a collective sigh of relief\u201d after the softer than anticipated inflation report.<\/p>\n

\u201cThat may be enough to keep the Reserve Bank on the sidelines next month,\u201d Smith said, although \u201cthe detail in today\u2019s numbers reveals some red flags\u201d.<\/p>\n

\u201cPrice pressures in the service economy that are not necessarily linked to the Middle East conflict picked up, suggesting that homegrown inflationary pressures are yet to be tamed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Australian mortgage-holders have \u201cdodged a bullet\u2019, with the Reserve Bank now less likely to hike rates next month…\n","protected":false},"author":2,"featured_media":573366,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-573365","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/573365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=573365"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/573365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/573366"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=573365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=573365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=573365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}