Australia’s Inflation Gauge Picks Up Again

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Australia’s Monthly Inflation Gauge, compiled by the Melbourne Institute, rose 0.4% month-over-month in September 2025, reversing a 0.3% decline in the previous month. The rebound adds to signs that Q3 inflation could come in hotter than expected, even as the Reserve Bank of Australia aims to keep price growth within its 2–3% target range. The central bank held the cash rate at 3.6% in September but cautioned that inflation had been more persistent than anticipated, particularly in market services, while the labor market remained tight. The board has already cut rates three times this year, each time after quarterly inflation data releases, to support growth. Although Australia’s annual inflation eased to 2.1% in Q2 2025—the lowest since early 2021—the monthly CPI jumped 3.0% year-on-year in August, the highest in 13 months, following the expiry of state electricity rebates.

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