Australia’s inflation rate has slowed to its lowest growth in over three years, yet an interest rate cut still seems unlikely when the Reserve Bank of Australia (RBA) meets next week.

The Consumer Price Index rose by 2.8% over the 12 months to September, down from 3.8% in the 12 months to June and below most economists’ expectations.

According to Michelle Marquardt, the head of price statistics at the Australian Bureau of Statistics, the growth for the September quarter was only 0.2%.

While most goods and services continue to see price increases, this slowdown was largely due to drops in electricity and petrol costs, even as insurance costs surged by 14% and childcare by 12.1%.

Although the 2.8% inflation rate appears within the RBA’s target of 2% to 3%, the RBA uses a “trimmed” inflation measure, which currently sits at 3.5%, to assess underlying trends.

RBA Governor Michelle Bullock stated last month that they need more evidence that inflation is “sustainably” within the target range before considering a rate cut.

With the RBA meeting on November 4 and 5, most economists believe a rate reduction is now unlikely until early 2025, following this week’s inflation data.