Underlying inflation in Australia came in below market expectations for the June quarter, providing a significant reprieve for the Reserve Bank of Australia (RBA) as it weighs its next policy move.
The softer-than-forecast rise in core price pressures suggests that the central bank has gained additional breathing room, diminishing the immediate need to implement further interest rate hikes.
The RBA has already raised the cash rate three times this year in an effort to anchor inflation expectations.
However, the latest data indicates that the tightening cycle may be nearing its peak, at least in the short term.
While headline inflation remains a concern, the underlying trend is showing signs of stabilization, which could influence the board's decision at its upcoming meeting.
Despite the broader cooling trend, specific sectors continue to face upward price pressure.