New data from the Australian Bureau of Statistics shows inflation moderated in July.
Headline inflation has now fallen for four consecutive months.
This is a promising result in the face of all of this global uncertainty but we know people are still under pressure.
Inflation has come down considerably, it's already substantially lower than forecast at Budget time, but we know it's still too high and it will bounce around in the coming months on its way back to the target range.
Inflation data is even more volatile than usual given movements in fuel and the impact of energy rebates, and the ongoing impact of the war in the Middle East.
Inflation rose in most advanced economies in July, even though it fell in most of them in June.
Today's figures show headline inflation in Australia was 3.5 per cent in the 12 months to July 2026, down from 3.8 per cent in June.
Trimmed mean inflation was steady at 3.6 per cent in the 12 months to July 2026.
A key reason why inflation moderated today is because electricity prices fell 1.6 per cent in the month.
We already had an inflation challenge in our economy but the war is making it worse.
While the initial impact from the conflict on inflation came from fuel, we're now seeing it broaden into other areas of our economy like dwelling construction costs.
When we came to office, headline inflation was north of 6 per cent and rapidly rising, it's now much lower than that.
Underlying inflation was around 5 per cent but it is now much lower.
We recognise people are under pressure which is why we're rolling out responsible cost of living relief including cutting taxes five times, cheaper medicines and higher wages.
Australia is not immune from global uncertainty, but we're well placed and well prepared to confront it with faster growth than almost every major advanced economy, booming business investment, low unemployment, solid wages growth and stronger public finances backed‑in by the ratings agencies in recent weeks.
We've made a lot of progress together in the economy, but there's more work to do because people are still under pressure.
That's why addressing inflation and helping with the cost of living was a big focus of the Budget and it's a big focus of the government alongside building a more productive and resilient economy.
