The Australian Bureau of Statistics reported this morning that the monthly CPI indicator climbed to 2.8 percent for July, which surpassed the anticipated 2.3 percent.

Following months where prices had been easing, reducing the monthly inflation indicator to 1.9 percent in June, today’s figures mark the highest level since July 2024, prior to when the Reserve Bank started reducing interest rates.

Core inflation measures showed an increase, with the trimmed mean, which the RBA favors for assessing underlying inflation, rising from 2.1 to 2.7 percent. Furthermore, the CPI excluding volatile items and holiday travel increased from 2.5 to 3.2 percent.

“This represents a significant reversal from the steady disinflation trend observed recently and brings inflation back toward the upper range of the RBA’s target. This indicates that price pressures, especially in housing, are more persistent than policymakers anticipated,” eToro market analyst Josh Gilbert remarked.

However, the monthly inflation read doesn’t carry the same weight as the ABS’s quarterly numbers.

The subsequent quarterly data release is scheduled for October 29, following the RBA’s next monetary policy meeting; however, another set of monthly figures will be available prior to the September 30 interest rates decision.

“The data will be a setback for those expecting continued easing after the rate cut earlier this month,” Gilbert said.

“While the RBA has signalled more easing is likely, today’s figures reinforce the board’s cautious stance and reaffirms that fighting inflation is no easy task.

“Markets still expect another cut before year-end, but if we see more reports similar to this, that expectation will diminish.

“Let’s be clear though, this is just one print. The board prefer to focus on quarterly data, but there’s no doubt this will unsettle the board.”