11.09.202501:31:43UTC+00Australia Inflation Expectations Jumps from 5-Month Low

Consumer inflation expectations in Australia increased to 4.7% in September 2025, up from a five-month low of 3.9% in August. This rise was driven by stronger domestic demand, which has sparked concerns about renewed inflationary pressures. Household consumption demonstrated resilience in the second quarter, further supporting this outlook. This sentiment was echoed by RBA Governor Michele Bullock, who observed "a little bit more growth" in the private sector, deeming it beneficial for the economy. Nevertheless, the central bank remains vigilant amid heightened uncertainties on both domestic and global fronts, including trade policy risks. In August, the Reserve Bank of Australia reduced its cash rate by 25 basis points to 3.6%, marking the lowest level since April 2023, in a bid to bolster growth. On the data side, July's monthly Consumer Price Index (CPI) surged by 2.8% year-on-year, the fastest rate in a year, despite headline inflation in the second quarter decelerating to 2.1%, its lowest level since early 2021. Meanwhile, the trimmed-mean CPI, the RBA's preferred core measure, eased to 2.7%, its weakest since late 2021, yet remaining slightly above the central bank's midpoint target range of 2–3%.