Inflation in Australia remained in retreat in the last quarter of 2024, stoking the case for the central bank to join the global easing cycle by cutting rates at its coming meeting in February.

Australian consumer prices rose at the slowest pace in almost four years in the December quarter, while a pullback in housing costs helped cool core inflation and open the door to a cut in interest rates as early as next month.

Financial markets are betting the Reserve Bank will preview a rates reprieve in February, with official figures showing the RBA's preferred measure of inflation fell to 3.2 per cent over the year to December.

A larger than expected drop in inflation data has boosted the chances of an interest rate cut as soon as February.

Australia’s quarterly inflation data this week may be key to whether the central bank finally embarks on a monetary easing cycle soon, and in turn, help decide the timing of an election due by May 17.

Slower growth in construction costs have helped ease inflation fears and raise hopes the Reserve Bank could soon start cutting interest rates.

The cash rate has stayed the same since November 2023, with Reserve Bank of Australia (RBA) governor Michele Bullock saying that taming inflation is a "balancing act". So, what does the RBA consider when setting its cash rate target,

News Corp Senior Writer Patrick Carlyon breaks down the latest data concerning Australia’s inflation numbers. “This is great news for Australians,” Mr Carlyon told Sky News host Danica De Giorgio. “These numbers do give the Reserve Bank ground to actually drop interest rates later this month.

The chance of a Reserve Bank rate cut in February has improved considerably after underlying inflation came in below expectations for the December quarter.