Australia Inflation Expectations Lowest in 5 Months

Consumer inflation expectations in Australia fell to 3.9% in August 2025 from 4.7% in July, easing for the second straight month and marking the lowest level since March.

The decline underscored a further slowdown in inflation from its 2022 peak alongside signs of a softer labor market.

Earlier in the month, the Reserve Bank of Australia unanimously cut its cash rate by 25 bps to 3.6%, the lowest since April 2023, after cumulative reductions of 75 bps since January.

In Q1, annual inflation held at 2.4%—a four-year low and unchanged for the third straight quarter—while the trimmed-mean CPI, the RBA’s preferred core gauge, eased to 2.9%, its lowest since late 2021 but still slightly above the 2–3% midpoint target.

Meanwhile, June’s monthly CPI rose 1.9% year-on-year, the weakest pace since March 2021.