Australia’s underlying inflation measure rose to 3.6% in May, up from 3.4% in the previous month, according to data reported by the Australian Financial Review.
The increase in the Reserve Bank of Australia’s preferred gauge of price pressures stands in contrast to the headline consumer price index, which slowed to 4%.
The divergence between headline and core figures suggests that while government policy measures, such as the Albanese administration’s fuel excise cut, are dampening visible price tags, broader cost pressures remain entrenched.
This persistence in underlying inflation undermines the case for an imminent easing cycle and reinforces market expectations that the RBA may need to maintain a restrictive stance or even consider further rate hikes.
The data adds to a complex global inflation landscape.
While the UK saw its overall inflation rate remain unchanged in May due to cooling grocery and appliance costs offsetting higher petrol and air fares, Australia’s core metric is moving in the opposite direction of the desired disinflationary trend.