But a higher June quarter number was expected by the Reserve Bank of Australia and economists, with the headline figure in line with forecasts.
How Australia’s inflation rate has changed
Deloitte Access Economics partner Stephen Smith said the June consumer price index should “put to rest the tired notion the RBA should lift rates”, a move he believes would “tempt a recession”.
The factors still driving inflation, such as rents — pushed higher by housing shortages — and fruit prices altered by bad weather, were not fixed by higher interest rates, Mr Smith said.
Australia’s interest rates are lower than some places, but inflation is higher.
Betashares chief economist David Bassanese said the consumer price index for June should rule out an interest rate hike at the August interest rate meeting next Tuesday.
“Those with a mortgage can breathe a sigh of relief, at least for now, though Australia retains a sticky inflation problem and interest rate increases at some stage this year can still not yet be confidently ruled out,” he said.