Australia’s monthly inflation quickened to 2.8 per cent in the year to July, up from 1.9 per cent in June and the highest pace since July 2024, according to new data from the Australian Bureau of Statistics.
Michelle Marquardt, ABS head of prices statistics, said: ‘The 2.8 per cent annual CPI inflation to July was up from 1.9 per cent to June. This is the highest annual inflation rate since July 2024, following several months of easing inflation.’
housing, food and non-alcoholic beverages, and alcohol and tobacco were the biggest contributors to the rise, with annual increases of 3.6 per cent, 3.0 per cent and 6.5 per cent respectively.
Measures of underlying inflation also firmed. The ABS said the annual trimmed mean rose to 2.7 per cent in July from 2.1 per cent in June, while the CPI measure excluding volatile items and holiday travel accelerated to 3.2 per cent from 2.5 per cent. ‘Annual trimmed mean inflation was 2.7 per cent to July 2025. This was up from 2.1 per cent inflation to June and similar to the rate that we saw three months ago’, Ms Marquardt said.
electricity was a key driver within housing. Power bills were up 13.1 per cent over the year to July, reversing a 6.3 per cent annual fall in June. On a monthly basis, electricity rose 13.0 per cent, with the ABS citing two main factors: households in New South Wales and the ACT did not receive payments of the extended Commonwealth Energy Bill Relief Fund (EBRF) in July, with rebates to commence in August; and annual electricity price reviews took effect. The ABS noted that electricity costs excluding the impact of government rebates rose 4.8 per cent in July, while the increase inclusive of rebates was larger at 13.0 per cent mainly due to the absence of July payments in NSW and the ACT.
Rental inflation eased to 3.9 per cent annually from 4.2 per cent in June, the slowest growth since November 2022, consistent with stable vacancy rates across most capital cities. New dwelling prices were up 0.4 per cent over the year, unchanged from June, reflecting a subdued new home market.
Holiday travel and accommodation prices rose 3.3 per cent annually after a 3.7 per cent fall in the year to June. In monthly terms they climbed 4.7 per cent amid school holiday demand and higher domestic airfares and accommodation costs.
food and non-alcoholic beverage inflation remained around 3 per cent for an eleventh straight month, at 3.0 per cent in July. Within that, coffee, tea and cocoa prices were up 14.4 per cent over the year. ‘While annual inflation eased for some food categories in July, coffee, tea and cocoa prices continued to rise, up 14.4 per cent in the past 12 months. ‘This comes as supply has been affected by adverse weather conditions impacting major overseas coffee bean-growing areas,’ Ms Marquardt said.
Headline inflation remains within the Reserve Bank of Australia’s 2–3 per cent target band, but the lift in underlying measures underscores ongoing price pressures as temporary energy rebates and seasonal travel swings add volatility to monthly readings. The ABS noted the monthly CPI is a timelier indicator than the quarterly index and some components are only updated once a quarter.
Source: Australian Bureau of Statistics.
