Data published by the Australian Bureau of Statistics showed that consumer inflation fell to a 4-month low in July on the back of government rebates on electricity, but exceeded experts' forecasts. Meanwhile, core inflation reached its lowest level since January.
According to the report, the CPI rose by 3.5% per annum in July after an increase of 3.8% per annum in June. Economists had expected an increase of 3.4% per annum. House price growth slowed to 4.0% from 5.5% in June, due to a sharp drop in the cost of electricity (-5.1% vs. 7.5%). Meanwhile, transport prices increased by 3.4% (a 5-month low) after an increase of 4.2% in June. Food inflation reached a 3-month high (3.8%), while price growth accelerated for alcohol and tobacco (7.2% vs. 6.9% in June) and communications (1.9% vs. 1.0%).
On a monthly basis, the CPI remained unchanged, as falling electricity and gasoline prices were offset by an increase in the cost of rent and food.
Meanwhile, the measure of core inflation, the trimmed mean, slowed 3.8% per annum from 4.1% per annum in June. CPI excluding volatile items and holiday travel rose by 3.7% per annum after an increase of 4.0% per annum in June. The latest reading was the lowest since January. However, inflation remains outside the RBA's target range of 2-3%.