Australia's consumer price index (CPI) rose 3.8% in the 12 months to June from a 4% increase in the year to May, the Australian Bureau of Statistics reported Wednesday.

The largest contributor to annual inflation was housing, which rose 6.8%, followed by food and non-alcoholic beverages and recreation and culture, both up 3.3%.

Annual housing inflation was primarily driven by rising costs for electricity and new dwellings.

Electricity remains a major driver of annual inflation, with prices over 22% higher than a year ago, largely due to the end of government rebates that had previously lowered household electricity bills, said Rachael McCririck, the bureau's head of prices statistics.

Trimmed mean annual inflation was 3.6% in the 12 months to June, unchanged from the 12 months to May.

Transport inflation eased notably, with the annual rate slowing to a 0.1% increase, compared with a 3.3% rise in May.

"Lower world oil prices as a result of some stabilization in the Middle East in June contributed to fuel prices falling 10.9% in the month," McCririck added.

The CPI declined by 0.1% in seasonally adjusted terms during the month of June.