Australia’s consumer price index (CPI) has risen to 3 per cent year-on-year in August, according to the Australian Bureau of Statistics. This represents an increase from 2.8 per cent in July and marginally exceeds the market consensus forecast of 2.9 per cent. The current figure marks the highest level since July 2024, signalling a potential shift in the country’s economic landscape.
Annual trimmed mean inflation, which is the Reserve Bank of Australia’s (RBA) preferred measure that excludes volatile items, was recorded at 2.6 per cent to August 2025. This shows a slight decrease from the 2.7 per cent reported to July 2025. The ABS noted that the most significant contributors to the annual inflation rate were housing, food and non-alcoholic beverages, and alcohol and tobacco.
The Reserve Bank of Australia closely monitors inflation data to ensure it remains within the central bank’s target band and continues to move in the desired direction. Despite a pick-up in the Australian economy, there are emerging indications of a slowdown in the job market. Current market predictions suggest a low probability (9 per cent) of an interest rate cut next week and a 64 per cent chance of a rate adjustment in November.
The RBA is scheduled to hold its upcoming policy meeting on September 20th, where it is widely anticipated to maintain the cash rate at 3.6 per cent. Financial markets are closely watching for any indications that may sway the RBA’s future monetary policy decisions.
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