By Poppy Johnston in Canberra

Australia’s annual headline inflation rate has held at 2.1 per cent in October for a second month, coming in a little below expectations.

Despite clocking a second month at the bottom of the Reserve Bank of Australia’s two-three per cent target range, the central bank has been more focused on underlying measures that strip out volatility.

The monthly gauge’s trimmed mean annual inflation rate ticked higher to 3.5 per cent in October, from 3.2 per cent in September.

Australian Bureau of Statistics head of prices statistics Michelle Marquardt said annual headline inflation had held at its lowest rate since July 2021.

“The falls in electricity and fuel had a significant impact on the annual consumer price index measure this month,” she said.

The central bank has kept interest rates high at 4.35 per cent for more than 12 months to tame inflation.

Economists are broadly of the view the next interest rate move will be down but the timing remains unclear, with stretched borrowers hoping for repayment relief as soon as possible.

The bureau’s monthly inflation readout is considered more volatile and not as comprehensive as the quarterly version, with the RBA placing more emphasis on the latter.