New figures today show that underlying inflation has moderated substantially to its lowest level in more than thirty months and headline monthly inflation moderated substantially by 0.8 percentage points in August, returning to the RBA’s target band for first time since October 2021.
These are very welcome and encouraging numbers.
They show our policies are helping in the fight against inflation, but we’re not complacent because we know people are still under pressure.
Monthly inflation was 2.7 per cent in the year to August 2024, down from 3.5 per cent in July 2024. It’s now less than half the 6.1 per cent we inherited and less than a third of its peak.
Underlying inflation moderated to its lowest rate in more than 30 months. Annual trimmed mean inflation moderated to 3.4 per cent in the 12 months to August 2024, down from 3.8 per cent in July 2024 and 4.3 per cent at the election.
Excluding volatile items and holiday travel, monthly inflation moderated to 3.0 per cent in August, down from 3.7 per cent in July.
Non‑tradable inflation was 3.8 per cent in the 12 months to August 2024, down from 4.5 per cent in July 2024 and much lower than the 5.3 per cent we inherited.
This shows we’ve made welcome and encouraging progress on inflation but we want it to moderate further and faster in quarterly terms as well.
Our policies are making a positive difference, but they aren’t the only factor that led to this result with underlying price measures also moderating in today’s figures.
This is a good result that shows we’re getting inflation under control but we’re not getting ahead of ourselves because we know it doesn’t moderate in a straight line.
The monthly figures can jump around which is why the quarterly data is the official measure of inflation, but the moderation in today’s figures is very heartening.
The quarterly data also confirms we’ve made welcome progress, with inflation half its peak and annual trimmed mean inflation having moderated for six consecutive quarters.
It’s encouraging to see the progress in today’s figures, particularly as we saw core inflation rise in multiple G7 countries just last week.
We recognise people are under pressure and we’re doing something about it.
We’ve delivered the first back‑to‑back surpluses in almost two decades which the RBA Governor has said are helping in the fight against inflation.
ABS data today again shows that inflation would be higher without our responsible cost‑of‑living relief.
Rents increased 6.8 per cent in the year to August but without our largest increase to Rent Assistance in 30 years, they would have increased 8.6 per cent.
Electricity prices fell 17.9 per cent in the year to August but without the energy rebates we are rolling out with the states, they would have decreased 2.7 per cent.
Our economic plan is all about easing the cost of living and fighting inflation without crunching the economy and today’s data confirms our policies are making a meaningful difference.