Australian consumer price index inflation grew slightly more than expected in August, driven by housing and electricity costs, highlighting persistent price pressures that could complicate the Reserve Bank of Australia’s policy path.
CPI grew 3% year-on-year in August, marking the fastest pace since July 2024, data from the Australian Bureau of Statistics showed on Wednesday. The print compared to expectations of 2.9% and ticked up from the 2.8% in July.
Underlying price pressures were mixed. The trimmed mean CPI eased slightly to 2.6% in August from 2.7% in the previous month, while inflation excluding volatile items and holiday travel climbed to 3.4% from 3.2%.
Michelle Marquardt, ABS head of prices statistics, said housing, food and non-alcoholic beverages, and alcohol and tobacco were the biggest contributors to the rise. Housing inflation accelerated to 4.5% from 3.6% in July, reflecting a sharp increase in electricity bills.
Electricity costs surged 24.6% from a year earlier, largely because state government rebates in Queensland, Western Australia, and Tasmania, which lowered bills last year, have now expired, the ABS noted.
Analysts at Westpac noted there was “upside risk” to the bank’s estimate for a 0.7% quarterly rise in the trimmed mean, given the resilience of services prices.
Wednesday’s data comes days ahead of the RBA’s September policy meeting, where markets are largely expecting the central bank to hold rates steady.
Last month, the RBA reduced rates by 25 basis points and signalled further easing if incoming data supported the move. But Wednesday’s data now complicates the path forward for the RBA, given that inflation may not be cooling in line with the central bank’s expectations.
Source
https://www.investing.com/news/economic-indicators/australia-cpi-inflation-rises-3-yy-in-aug-on-housing-energy-costs-4252348
