Headline CPI at 2.8 in Q3, back in RBA39;s target band of 23
Core sticky at 3.5, services inflation picks up
Data supports view of 2025 rate cuts; muted reaction in markets

SYDNEY, Oct 30 Reuters Australian consumer price inflation slowed to a 312 year low in the third quarter, though the core measure was still sticky and reinforced market wagers that the central bank won39;t start cutting rates until next year.

Overall, the report was rather mixed, with consumers benefiting from government rebates on electricity and a drop in petrol, while services price pressures persisted.

That kept market reaction muted. Investors slightly pared the chance of a rate cut from the Reserve Bank of Australia this December and next February to just 24 and 44. Markets still see April next year as the most likely timing for the first easing.

Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index CPI rose 0.2 in the third quarter, under forecasts of a 0.3 increase.

Annual inflation dropped to 2.8, from 3.8, taking it back into the RBA39;s 23 target band for the first time since 2021, a result that was largely expected.

The slowdown was driven by a 17.3 drop in electricity prices due to the government39;s subsidies, while petrol fell 6.2 in the quarter.

Policymakers are more focused on core inflation and the trimmed mean measure increased by 0.8 in the quarter, just above forecasts of a 0.7 gain. The annual pace though slowed to 3.5 from 4.0….