The monthly Consumer Price Index (CPI) indicator rose 2.8 per cent in the 12 months to July 2025, according to the latest data from the Australian Bureau of Statistics (ABS). 

Michelle Marquardt, ABS head of prices statistics, said: ‘The 2.8 per cent annual CPI inflation to July was up from 1.9 per cent to June. This is the highest annual inflation rate since July 2024, following several months of easing inflation.’

The largest contributors to this rise were Housing (+3.6 per cent), Food and non-alcoholic beverages (+3.0 per cent), and Alcohol and tobacco (+6.5 per cent).

When prices for some items change significantly, measures of underlying inflation (like the annual trimmed mean and CPI excluding volatile items and holiday travel) can give more insights into how inflation is trending. 

‘Annual trimmed mean inflation was 2.7 per cent to July 2025. This was up from 2.1 per cent inflation to June and similar to the rate that we saw three months ago’, Ms Marquardt said.

The CPI excluding volatile items and holiday travel measure rose 3.2 per cent in the 12 months to July, compared to a 2.5 per cent rise in the 12 months to June.

Annual Housing inflation was 3.6 per cent to July, up from 1.6 per cent to June, reflecting increases in Electricity costs. 

Electricity costs rose 13.1 per cent in the 12 months to July, compared to a 6.3 per cent fall in the 12 months to June.

In monthly terms, electricity costs rose 13.0 per cent in July. There were two main contributors to the monthly increase. The largest contributor was that households in NSW and ACT did not receive payments of the extended Commonwealth Energy Bill Relief Fund (EBRF) in July. Payment of rebates for households in NSW and ACT will instead commence in August. This means that those households had higher out-of-pocket costs for electricity in July. In addition to this, prices rose due to annual electricity price reviews coming into effect. Comparing the indexes for Electricity with and without changes related to the Commonwealth Energy Bill Relief Fund (EBRF) shows that, for the month of July, costs excluding the impact of EBRF rose 4.8 per cent. The increase in electricity costs inclusive of the impact of EBRF was higher (13.0 per cent) mainly due to households in NSW and ACT not receiving rebates in July.

Comparing the indexes for Electricity with and without changes related to the Commonwealth Energy Bill Relief Fund (EBRF) shows that, for the month of July, costs excluding the impact of EBRF rose 4.8 per cent. The increase in electricity costs inclusive of the impact of

EBRF was higher (13.0 per cent) mainly due to households in NSW and ACT not receiving rebates in July.

Rents rose 3.9 per cent in the 12 months to July, following a 4.2 per cent rise in the 12 months to June. This is the lowest annual growth in rental prices since November 2022, consistent with stable vacancy rates across most capital cities. 

New dwelling prices rose 0.4 per cent in the 12 months to July, unchanged from the 0.4 per cent rise in the 12 months to June. Annual growth in new dwelling prices remains low reflecting a subdued new home market. 

Holiday travel and accommodation prices rose 3.3 per cent in the 12 months to July, after seeing a 3.7 per cent fall in the 12 months to June. 

In monthly terms, Holiday travel and accommodation prices rose 4.7 per cent in July, as the July school holidays saw strong demand, and higher prices for domestic airfares and accommodation. 

Annual inflation for Food and non-alcoholic beverages was 3.0 per cent to July, compared to 3.2 per cent to June, and has remained around 3 per cent for the past eleven months.

‘While annual inflation eased for some food categories in July, coffee, tea and cocoa prices continued to rise, up 14.4 per cent in the past 12 months. 

‘This comes as supply has been affected by adverse weather conditions impacting major overseas coffee bean-growing areas,’ Ms Marquardt said.