Inflation settles, making room for interest rate cut

Also known as underlying inflation, the trimmed mean excludes or down-weights items with irregular price changes for a more accurate picture of price growth.

Headline inflation grew 0.9 per cent in the March quarter to reach 2.4 per cent on an annual basis for a second straight quarter, within the RBA's two to three per cent target range for the third quarter in a row.

The central bank had not forecast the trimmed mean to reach 2.8 per cent until the June quarter and has flagged that its May meeting would be an "opportune time" to revisit its monetary policy setting.

Economists at CBA, ANZ and Westpac expect a 25 basis point rate cut in May, which would bring the cash interest rate down to 3.85 per cent.