Australia's inflation rate fell again in July, although the latest figures came in slightly above economists' expectations.
New data from the Australian Bureau of Statistics (ABS) shows the Consumer Price Index (CPI) rose 3.5% over the 12 months to July, down from 3.8% in June.
The annual rate is still moving in the right direction, although economists had been expecting inflation to come in at around 3.3%.
Prices also rose 1% during July, above forecasts for a 0.8% increase, while underlying inflation remained elevated.
So, is another interest rate hike back on the table?
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What is still pushing prices higher?
Housing remained the biggest contributor to annual inflation, with prices across the group rising 5% over the year.
New dwelling prices increased 5.7%, rents were up 3.6%, and electricity prices rose 6.1%. Food and non-alcoholic beverages were also 3.2% higher, while recreation and culture prices increased 2.6%.
There were also some sizeable price moves during July.
Automotive fuel prices jumped 7.5% for the month after falling for 3 months in a row. The ABS said the increase was driven by higher global oil prices and the partial unwinding of the federal government's fuel excise relief measures.
Domestic holiday travel and accommodation prices also rose 6.2% as demand picked up during the school holiday period.
The RBA will be keeping a close eye on the underlying inflation figures as well.
Services inflation was still running at 3.7% over the year, while non-tradables inflation was sitting at 4.4%.
Could the RBA raise rates again?
The key number for the RBA was trimmed mean inflation, which gives a better idea of what is happening with underlying price pressures.
It rose 0.5% in July and remained at 3.6% over the year, still above the RBA's 2% to 3% target range.
That was also higher than expected, with economists forecasting a monthly increase of around 0.3%.
The RBA left the cash rate unchanged at 4.35% earlier this month after raising rates 3 times in 2026.
Minutes from that meeting showed the board considered another rate hike, but decided to keep rates on hold and wait for more data.
There are signs higher rates are already having an effect. Australia's unemployment rate rose to 4.5% in July, while employment unexpectedly fell by 15,800.
This gives the RBA something else to weigh up as it tries to bring inflation down without slowing the economy too much.
Mark your calendar for 29 September, when the RBA will hand down its next interest rate decision.
