Price pressures are easing off, with Australia’s annual inflation rate falling to 2.8 per cent, down from 3.8 per cent mid-year — slightly lower than expectations.

It’s the lowest annual inflation rate in three and a half years.

According to the Australian Bureau of Statistics (ABS), prices rose by 0.2 per cent in the September quarter, compared to the 1 per cent rise in the three months through June.

“The [quarterly rise] is the lowest outcome since the June 2020 quarter fall, which occurred during the COVID-19 outbreak and was driven by free childcare,” the ABS head of price statistics Michelle Marquardt said.

Prices of most goods and services continued to rise, but were offset by large falls in petrol, as global oil prices eased, and power prices, driven by government rebates across the states and territories.

“Without the rebates, electricity prices would have increased 0.7 per cent this quarter,” Ms Marquardt said.

The trimmed mean, a measure of underlying inflation which strips out the biggest price swings, fell to 3.5 per cent annually, down from 4 per cent the previous quarter and in line with market forecasts.

The Reserve Bank has forecast the headline annual rate of inflation to fall to 3 per cent by the end of 2024, but has tipped the trimmed mean to remain above its 2-3 per cent target band at 3.5 per cent.

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