A “material decline” in living standards and “stress in the system” weigh on millions as inflationary challenges continue to plague Australians, despite price rises simmering in recent years.

This is the analysis from a leading economist after Reserve Bank of Australia governor Michele Bullock admitted that while inflation has fallen, “the price level isn’t coming back down” .

“The higher price level has affected everyone - whether you’re paying a mortgage, renting, running a business, or just trying to make ends meet,” Ms Bullock told a parliamentary committee on Monday.

Her comment comes as trimmed mean inflation – the middle 70 per cent of price rises central to the RBA’s interest rate decisions – soared to 6.8 per cent in December 2022 before dropping to 2.7 per cent in June 2025.

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