Live Updates > Live Update Details
2025-07-30 10:55:59
Australia's Q2 inflation fell short of expectations, significantly increasing the probability of an August rate cut. 1. Australia's CPI rose 2.1% year-on-year in the second quarter, the lowest in more than four years. Core inflation slowed to 2.7%, a three-year low, reinforcing market expectations of a 25 basis point rate cut by the Reserve Bank of Australia in August. Westpac Chief Economist Luci Ellis stated that the inflation data supports continued easing by the Reserve Bank of Australia, predicting a rate cut on August 12th, potentially lowering it to 3.10% or lower by the end of the year. Market expectations for an August rate cut are close to 100%, with the Australian dollar holding steady at $0.6518, up about 0.17%. 2. Core inflation, trimmed mean, rose 2.7% year-on-year, near the midpoint of the Reserve Bank of Australia's 2%-3% target range. This reflects factors such as electricity costs and childcare rebates that have depressed prices, but this effect is expected to fade, and the CPI may rebound to 3%. New dwelling inflation fell from 1.6% to 0.7%, while service sector inflation slowed to 3.3%. Declining wage growth and a rise in the unemployment rate to 4.3% further contributed to the cooling of inflation.
