Australia Q2 inflation surprises on low side, heralds rate cut

SYDNEY (Reuters) -Australian consumer prices grew at the slowest pace in over four years in the June quarter, data showed on Wednesday, while core inflation hit a fresh three-year low and cemented market wagers for a cut in interest rates next month.

The Australian Bureau of Statistics’ consumer price index (CPI) rose 0.7% in the June quarter, under forecasts of a 0.8% increase. Annual CPI inflation dipped to 2.1%, from 2.4%, and again below forecasts.

The key trimmed mean measure of core inflation increased by 0.6% in the quarter, under forecasts of a 0.7% gain. The annual pace slowed to 2.7%, from 2.9%, taking it further into the Reserve Bank of Australia’s 2% to 3% target band.

(Reporting by Wayne Cole; Editing by Christopher Cushing)