Australia’s annual inflation rate unexpectedly eased to 3.8% in June 2026, down from 4.0% in May and below market expectations of 4.0%, but it remained above the Reserve Bank’s 2–3% target band. This was the smallest annual increase since February, driven largely by a moderation in goods inflation, which slowed to 3.5% from 4.2%, its lowest rate in four months. Transport costs rose just 0.1%, sharply down from 3.3% in May and the slowest pace in four months, while inflation in health services edged down to 3.7% from 3.8%.
In contrast, price pressures strengthened in several areas. Inflation accelerated for recreation, rising to 3.3% from 2.4%, and for housing, which increased to 6.8% from 6.5%. Food and non-alcoholic beverage inflation was unchanged at 3.3%. Services inflation also picked up, climbing to 4.0% from 3.7%.
Underlying measures showed a mixed picture. The trimmed mean CPI rose 3.6% year-on-year, matching its highest level since September 2024 but slightly undershooting forecasts of 3.7%. The weighted median CPI increased 3.7% year-on-year, edging up from 3.6% in May. On a monthly basis, headline CPI unexpectedly fell 0.1% in June, marking a second consecutive monthly decline and confounding expectations for a 0.2% increase.
