21.08.202501:56:06UTC+00Australia Inflation Expectations Lowest in 5 Months

In August 2025, consumer inflation expectations in Australia decreased to 3.9% from 4.7% the previous month, continuing a downward trend for the second consecutive month and reaching the lowest point since March. This reduction highlights a continued slowdown in inflation from its peak in 2022, aligned with indications of a weakening labor market. Earlier this month, the Reserve Bank of Australia opted to decrease its cash rate by 25 basis points to 3.6%, the lowest level since April 2023. This follows a total reduction of 75 basis points since January. In the first quarter, annual inflation remained steady at 2.4%, a four-year low, unchanged for the third quarter in a row. Concurrently, the trimmed-mean Consumer Price Index (CPI), which is the RBA's preferred measure for core inflation, declined to 2.9%, the lowest since late 2021, yet slightly above the bank’s target midpoint of 2–3%. Additionally, June's monthly CPI saw a year-on-year increase of 1.9%, the slowest rate since March 2021.