Australia Inflation Gauge Highest in 19 Months

Australia’s Monthly Inflation Gauge by the Melbourne Institute surged 0.9% in July 2025, marking the steepest rise since December 2023 and a sharp rebound from June’s modest 0.1% increase. The jump adds to concerns for the Reserve Bank of Australia, which remains cautious amid ongoing uncertainty in supply chains and consumer demand. According to the July meeting minutes, the central bank still expects underlying inflation to gradually ease but stay in the upper half of its 2–3% target band through late 2025. Meanwhile, headline inflation is projected to rise temporarily toward the top of the range by year-end and remain elevated in 2026, largely due to the scheduled phase-out of household energy subsidies. RBA Governor Michele Bullock also flagged heightened external risks, citing the fragile global outlook and renewed U.S.-China tariff tensions, which could feed into imported inflation and disrupt commodity flows, a key factor for Australia’s trade-reliant economy.