The annual inflation rate in Australia eased to 3.9% in Q2 2026, defying market expectations that it would hold at an over two-year high of 4.1% in Q1. Still, it remained well above the central bank's 2-3% target. On a quarterly basis, consumer prices rose 0.6%, slowing from a 1.4% increase in the previous period and coming slightly below expectations for a 0.7% gain. Meanwhile, the trimmed mean measure of annual core inflation, which excludes the most volatile components such as fuel, edged up to 3.6% from 3.5%. The quarterly figure rose 0.8%, unchanged from the previous period but marginally below forecasts for a 0.9% increase.