Economists expect underlying inflation to fall, bolstering the prospect of a February rate cut

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.

Core inflation has fallen to 3.2 per cent annually, opening the door for the Reserve Bank to cut interest rates at its next meeting.

Australia’s core inflation eased by more than expected in the final three months of 2024, opening the door to an interest-rate cut as soon as next month and sending the currency lower.

Australia’s headline inflation rate dropped to a three-year low of 2.4% in the December quarter, according to the Consumer Price Index, adding to pressure for an interest rate cut by the Reserve Bank as soon as next month.

A Reserve Bank rate cut is on the cards for February after underlying inflation for the December quarter came in below expectations.