Good news for Australians: monthly inflation has hit a three-year low thanks to lower fuel prices and the government’s energy bill relief. According to the Australian Bureau of Statistics (ABS), headline inflation dropped from 3.5% in July to 2.7% in August, the lowest since August 2021. While this figure falls within the Reserve Bank of Australia’s target range of 2-3%, it may not prompt an interest rate cut due to the $3.5 billion energy rebates.
Despite this, the news is largely positive, with core inflation hitting 3% and core inflation excluding volatile items reaching 3.4%. ABS’s Michelle Marquardt noted, “Both measures of annual underlying inflation in August are the lowest they have been for 2.5 years.” The impact of reduced electricity and fuel prices played a significant role in this decline.