The Australian Bureau of Statistics has reported a 1% increase in headline inflation for the June quarter, raising the annual rate to 3.8%.

Underlying inflation, which is closely monitored by the Reserve Bank of Australia (RBA), also rose by 0.8% in the last quarter, resulting in an annual rate of 3.9%, the lowest since early 2022.

The monthly measure of inflation eased from 4% in May to 3.8% for the year ending in June, indicating a potential trend of declining inflation.

In response to rising inflation pressures, the Australian government is implementing measures such as energy rebates and increased rent assistance.

Without the government's energy relief fund, electricity prices could have surged by 14.6% over the past year.

Electricity prices increased by 2.1% in the quarter, contributing to a total annual increase of 6%.

Food and non-alcoholic beverages saw a 1.2% rise in the quarter, leading to a 3.3% annual increase, despite a sixth consecutive quarterly decline in food inflation.

Fruit and vegetable prices surged by 6.3% due to unfavorable growing conditions, marking the highest quarterly rise since 2016.

Rents increased by 2%, along with the cost of new dwellings, which were identified as significant drivers of inflation for the quarter.

Retail sales data showed a 0.5% increase in value in June due to end-of-financial-year sales, although the volume of retail sales fell by 0.3% in the quarter, indicating declining consumer spending.

Home buyers may have avoided an interest rate rise in August as inflation figures aligned with the Reserve Bank's forecasts.

The RBA's upcoming meeting is expected to address these inflation figures, which were previously forecasted at 3.8%.