The monthly consumer price index rose by a stronger-than-expected 3.5 per cent over the 12 months to July.

The inflation gauge was tipped to moderate to 3.3 per cent in July, from 3.8 per cent in June, to reflect energy bill relief kicking in across some parts of the country.

“The first instalments of the 2024/25 Commonwealth energy bill relief fund rebates began in Queensland and Western Australia from July 2024 with other states and territories to follow from August,” Australian Bureau of Statistics acting head of prices statistics Leigh Merrington said.

State-specific rebates were also introduced in Western Australia, Queensland and Tasmania, he added.

“Altogether these rebates led to a 6.4 per cent fall in the month of July.”

The Reserve Bank of Australia has already indicated it plans to look through the temporary bill relief and focus on underlying inflation.

The central bank maintains core inflation is still too high and has pushed back on expectations of a near-term interest rate cut, diminishing hopes of repayment relief before the end of a year.

Excluding volatile price changes across fuel, holiday travel and fruit and veg, inflation moderated to 3.7 per cent in July, down from four per cent in June.

-AAP