Inflation Data – June quarter 2025
The annual pace of headline inflation, out last Wednesday, fell from 2.4% to 2.1% between March and June 2025.
The Reserve Bank of Australia is highly likely to cut rates to avoid falling below their lower target band. That’s great for borrowers and not so great news for depositors.
The "trimmed mean" measure of inflation, which is the Reserve Bank's preferred measure of underlying inflation, also declined. It fell from 2.9% to 2.7% between March and June, which broadly matches the Reserve Bank's forecasts from May.
In the RBA board's recent rates meeting, a majority of its members voted to keep interest rates on hold this month rather than to cut rates, saying they wanted to wait for more information to confirm that inflation was under control.
But a week later, new data showed the national unemployment rate had picked up from 4.1% to 4.3% in June, to a three-year high.
Annual inflation for Services lowest since June 2022
Annual Services inflation was 3.3% to the June quarter, down from 3.7% to the March quarter due to easing price rises for rents and insurance. Annual Goods inflation was 1.1% to the June quarter, down slightly from 1.3% to the March quarter. The slowing in annual Goods inflation was primarily due to falls in automotive fuel prices, which are 10.0% lower compared to 12 months ago. In addition, annual inflation for new dwellings eased from 1.4% to the March quarter to 0.7% to the June quarter.
Annual inflation easing for most Services categories
Annual Services inflation has continued to ease for most categories in recent quarters. Increases in rent prices have consistently been lower over the past four quarters. There has also been a notable drop in price rises for insurance, from 14% increases last year to less than 4% in the 12 months to the June 2025 quarter.
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