Australia CPI rises faster than expected in July

August 27, 2025 (MLN): Australian consumer prices jumped by more than expected in July, fueled by a sharp rise in electricity costs tied to the timing of government rebates, adding volatility to this year’s inflation series.

Data from the Australian Bureau of Statistics showed the monthly consumer price index (CPI) rose 2.8% from a year earlier, compared with 1.9% in June and well above median forecasts of 2.3%. On a monthly basis, CPI climbed 0.9%.

Core readings also quickened, with the trimmed mean rising to 2.7% from 2.1% and a measure excluding volatile items and holiday travel accelerating to 3.2% from 2.5%.

The bureau said electricity prices surged 13% in July, as households in New South Wales and the Australian Capital Territory did not receive federal government rebates during the month.

“This means that those households had higher out-of-pocket costs for electricity in July. In addition to this, prices rose due to annual electricity price reviews coming into effect,” said Michelle Marquardt, head of prices statistics.

She added those households will receive the rebates in August, as CNBC reported.

Other categories showed mixed trends, with rents up 3.9% in the 12 months to July, the slowest pace since late 2022, while clothing and footwear recorded a 1.7% monthly increase.

The Reserve Bank of Australia (RBA), which cut interest rates for a third time this month, has indicated more easing remains possible depending on incoming data.

Policymakers projected headline inflation, which stood at 2.1% last quarter, would rise to 3.1% by mid-next year as the effect of electricity rebates fades.

Core inflation is expected to stay near 2.6% over the coming years.

The inflation update covers only a portion of the CPI basket and leans more heavily on goods than services.

The statistics bureau said the full monthly inflation data will become available from November.

The Australian dollar edged back above 65 U.S. cents following the release.

Investors continued to anticipate that the RBA will deliver another rate cut in November.

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