Australian inflation falls but experts warn figure remains too high for RBA

Australia has made progress on headline inflation, but it is unlikely to sway the RBA’s thinking on interest rates, with figures remaining above the central bank’s target.

Headline inflation dropped to 3.5 per cent from 3.8 per cent over the 12 months until July, Australian Bureau of Statistics figures show.

Meanwhile, the all-important trimmed mean inflation rate – which removes the top and bottom 15 per cent of items – remained unchanged at 3.6 per cent.

Both figures are above the RBA’s target inflation rate of 2-3 per cent a year.

Ahead of the inflation figures being released, experts had forecast headline inflation would drop from 3.8 per cent to about 3.2 per cent.

While Australia has made progress on inflation, experts warn it largely due to timing, with a particularly bad July 2025 rolling out of the figures.

Originally published as Australian inflation falls but experts warn figure remains too high for RBA