Mortgage holders are eyeing more rate relief within weeks after the central bank’s preferred measure of inflation fell to its lowest level in almost four years.

Trimmed mean inflation, which omits volatile items to measure underlying growth in prices, was 0.6 per cent in the June quarter, the Australian Bureau of Statistics reported on Wednesday, and in line with economists’ expectations.

Over the year, underlying inflation rose 2.7 per cent, down from an annualised 2.9 per cent in the March quarter.

The last time the trimmed mean was that low was in December 2021.

The result should give the Reserve Bank of Australia “all the comfort it needs” to cut rates at its next meeting, KPMG chief economist Brendan Rynne said.

“Since the RBA’s last board meeting, it seems the arguments for lowering the cash rate have now materialised more than the arguments put forward to maintain the more restrictive monetary policy settings.

“Consumer and business confidence has continued to remain in the doldrums, with households and investors looking for continued rate relief before they open their wallets further.”

After the RBA’s last meeting, where it shocked the market by holding rates steady, Governor Michele Bullock said the board was waiting to confirm whether inflation is still on track to sustainably reach 2.5 per cent.

Federal Treasurer Jim Chalmers welcomed Wednesday’s data.

“New figures from the ABS show that headline and underlying inflation have both fallen to their lowest rates in almost four years,” he wrote on X.

“This is welcome and encouraging news.

“It’s an outstanding result which confirms we are sustainably in the band with substantially lower inflation.”

Opposition treasury spokesman Ted O’Brien said interest rates had been too high for too long under Labor, but the latest data offered hope.

“The price of everything has gone up under Labor and, despite today’s announcement, it is never coming down. The ABS data simply indicates prices are now increasing at a slower rate,” he said.

He blamed “Labor’s homegrown inflation, fuelled by an increase in government spending”.

“Comparable jurisdictions saw interest rates cut far sooner than in Australia, with Labor’s addiction to spending keeping rates higher for longer locally,” he said.

Traders cheered Wednesday’s data, with the Australian sharemarket hitting an intraday high shortly after 11.30pm AEST.

Housing, food and health costs drove inflation higher, while falling petrol prices took some steam out of the index, reflecting lower global oil prices.

The headline consumer price index rose 2.1 per cent over the 12 months to June.

“This is the lowest annual inflation rate since the March 2021 quarter,” ABS head of prices statistics Michelle Marquardt said.

-with AAP