Australia’s inflation rate eased to 4.9% in July, down from 5.4% in June

Australia’s inflation rate eased last month, led by falling prices for some goods, reducing the likelihood that the Reserve Bank will need to raise interest rates again.

The consumer price index for July came in at an annual rate of 4.9%, the Australian Bureau of Statistics reported on Wednesday. That rate was slower than the 5.4% pace in June and compared with economists’ forecast for CPI to drop to 5.2%.

The monthly inflation numbers can be volatile, particularly at the start of the financial year when a range of prices such as electricity are adjusted. The ABS had also indicated the July numbers would carry a higher than usual weighting for changes in goods prices and that later months would pick up more adjustments in services costs.

Still, borrowers and the RBA will be among those scrutinising the CPI changes closely. Prior to the release of today’s figures, investors had all but ruled out the central bank lifting its key interest rate at next Tuesday’s board meeting.

More to come.