Australia Inflation Gauge Inches Higher

The Melbourne Institute’s Monthly Inflation Gauge edged up 0.1% month-over-month in June 2025, rebounding from a 0.4% drop in the previous month and marking the fourth monthly increase so far this year. The rise came even as both headline and underlying inflation continued to ease within the Reserve Bank’s 2–3% target range. Australia’s monthly CPI rose 2.1% year-over-year in May, the lowest in seven months, while annual inflation held steady at 2.4% in Q1, unchanged for a second consecutive quarter and still at a four-year low. Trimmed mean inflation, which excludes volatile items, rose 2.9% year-over-year, the slowest pace since Q4 2021. In May, the RBA cut its cash rate by 25 basis points to 3.85%—its first rate cut since January—citing more balanced inflation risks. However, the central bank cautioned that uncertainty remains elevated, particularly due to volatility in global trade policies.