Australia's central bank expects underlying inflation to fall faster than previously projected as it downgraded the economic outlook, although a still tight labour market is likely to create some lingering price pressures.

The RBA cut its cash rate by 25 bps to 4.10%, initiating a new easing cycle amid easing inflation. Click here to read what this means for Australian equities.

Headline CPI corrected meaningfully from 3.8% in June 2024 to 2.4% in the third quarter, slightly below the mid-point of the central’s bank’s CPI target of 2-3%. High services inflation, which has been a bigger challenge, has also corrected further than expected, suggesting substantial progress on containing inflation.