Inflation has slowed for the third month in a row to 4.9% for July, according to new data from the Australian Bureau of Statistics (ABS).
This means prices were 4.9% higher in July than the year prior. This is down from 5.4% in June.
It is the lowest inflation rate since February 2022.
A quick refresher
The inflation rate indicates how much prices have increased over the past 12 months. Like many countries, Australia has been battling high inflation in the past year.
A lower inflation rate doesn’t mean prices are falling – it just means they aren’t increasing as much as they previously were.
Housing was a big contributor to the inflation rate still remaining high, with rent prices increasing to 7.6% in July, up from 7.3% in June.
The main contributors to the rate slowing down were fruit and vegetables (which have seen a 5.4% decrease in prices since last year) and fuel (which saw a -7.6% fall).
Why is inflation slowing?
The Reserve Bank (RBA) started to increase the cash rate in May last year to ease inflation.
In doing so, the RBA hoped to limit consumer spending, which slows down inflation (recent data suggests this is working).
It has kept the cash rate the same (4.1%) at its last two monthly meetings. The next monthly meeting is on Tuesday.