Annual headline inflation slowed to 4%, below expectations, while core CPI rose slightly above forecasts, signaling persistent price pressures.
Australia’s May 2026 headline consumer price index rose 4% year-over-year, below the anticipated 4.3%, while core CPI climbed 3.6%, exceeding the 3.5% forecast. The data suggests inflation is easing but remains sticky in key sectors.
Economists had expected a sharper decline in both measures, reflecting recent trends in global disinflation. The Reserve Bank of Australia has previously signaled caution on premature rate cuts, citing wage growth and service sector inflation.
Markets are reassessing the likelihood of near-term policy easing, with swaps pricing adjusting to a more prolonged tightening cycle.