Australia\u2019s path toward interest rate relief became clearer after the latest trimmed mean annual inflation rate fell to 2.7%, its lowest level since December 2021, according to the Australian Bureau of Statistics. This result marks the second consecutive quarter that inflation has stayed within the Reserve Bank of Australia\u2019s (RBA) target range of 2\u20133%, fueling expectations for a rate cut in August.<\/p>\n\n\n\n
Economists say this development could provide much-needed relief to millions of mortgage holders facing financial pressure. With the RBA\u2019s next meeting scheduled for 11\u201312 August, attention is turning to how policymakers, led by Governor Michele Bullock, will respond to the data and the growing calls for action.<\/p>\n\n\n\n
Following the release of the June-quarter figures, several leading economists confirmed that the conditions now favor a rate reduction. Bendigo Bank chief economist David Robertson said the data \u201cshould assure an RBA rate cut in August,\u201d and even suggested the possibility of a 35-basis-point cut, which would reduce the cash rate to 3.5%.<\/p>\n\n\n\n
Betashares chief economist David Bassanese<\/a>, who correctly predicted the RBA\u2019s rate hold in July, called the figures \u201cgood enough\u201d for a cut. He noted that while inflation at 2.7% is slightly above the RBA\u2019s May forecast of 2.6%, it still justifies an easing of what the bank itself has described as \u201cmodestly restrictive\u201d interest rates.<\/p>\n\n\n\n The trimmed mean inflation rate slowed from 0.7% to 0.6% in the June quarter, the lowest since December 2021. This downward trend in underlying inflation has strengthened confidence among economists that the RBA now has the room it needs to reduce rates without risking a reversal in progress<\/a>.<\/p>\n\n\n\n KPMG chief economist Brendan Rynne added that weak consumer and business confidence underscores the urgency for rate relief, arguing that \u201ctoday\u2019s CPI outcome should give the RBA all the comfort it needs to drop the cash rate at its next meeting.\u201d<\/p>\n\n\n\nInflation Slows to its Lowest in Years<\/h2>\n\n\n\n
Impact on Mortgage Holders and the Size of the Cut<\/h2>\n\n\n\n