Australia Inflation Expectations Jumps from 5-Month Low

Consumer inflation expectations in Australia rose to 4.7% in September 2025 from August’s five-month low of 3.9%. The increase came as stronger domestic demand raised concerns about renewed inflationary pressures, with household consumption proving resilient in Q2. Supporting this view, RBA Governor Michele Bullock noted that the private sector has begun to show “a little bit more growth,” which she described as positive for the economy. Still, the central bank remains cautious amid heightened domestic and global uncertainties, including trade policy risks. In August, the RBA cut its cash rate by 25 bps to 3.6%, the lowest since April 2023, to support growth. On the data front, July’s monthly CPI surged 2.8% yoy, the fastest in a year, even as headline inflation in Q2 slowed to 2.1%, its lowest since early 2021. Meanwhile, the trimmed-mean CPI, the RBA’s preferred core gauge, eased to 2.7%, also at its weakest since late 2021 but still slightly above the 2–3% midpoint target.