Australia’s annual inflation rises to 4.3% in September
Underlying inflation reached 3.6%. Most economists expect another rate increase at the Reserve Bank of Australia’s 3 November meeting, when the bank is due to decide.
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Underlying inflation reached 3.6%. Most economists expect another rate increase at the Reserve Bank of Australia’s 3 November meeting, when the bank is due to decide.
Australia’s annual consumer price inflation reached 4.3% in September 2026, Australian Bureau of Statistics figures released on 28 October showed. The figures, covered by the Guardian that day, show rising costs for household goods and services ahead of the next interest-rate decision.
The Reserve Bank of Australia’s cash rate remains at 4.6% after four increases in 2026. This benchmark influences lending rates, including mortgages, so another increase could raise borrowing costs further.
The consumer price index, or CPI, measures changes in prices of goods and services bought by Australian households. Annual headline inflation was up from 4% in August 2026.
The bank’s preferred underlying measure, trimmed mean inflation, reached 3.6% annually in September. Unlike headline CPI, this measure removes items with the most extreme price rises and falls rather than excluding a fixed set of categories.
The statistics bureau revised August’s annual trimmed mean figure down from 3.6% to 3.5% because of changes in seasonal factors, the adjustments used to account for recurring seasonal patterns.
Housing, the largest category in the CPI, contributed most to annual inflation, followed by transport, the statistics bureau said.
| Household spending category |
|---|
| Annual increase |
|---|
| Housing | 5.2% |
| Transport | 8.7% |
| Food and non-alcoholic beverages | 3.2% |
The Guardian said builders were passing higher material and labor costs into new-home prices, while electricity prices remained elevated. It linked much of the transport increase to higher fuel prices stemming from the US and Israel conflict with Iran.
Treasurer Jim Chalmers said high oil prices and a recovering private sector were the main causes of rising inflation. He also said the government accepted its part in fighting inflation.
Central bank officials have indicated that borrowing costs may need to rise further to bring inflation toward their 2.5% target, citing concerns about a materially worse inflation outlook. Deputy governor Andrew Hauser told a parliamentary hearing after the release that inflation was “too high.” He warned that rising longer-term inflation expectations could make inflation harder to eliminate, but said that risk was not necessarily taking hold yet.
Stephen Smith, a partner at Deloitte Access Economics, expected another rate increase. He said the bank had little appetite to let inflation expectations rise after a prolonged period above target. His concern was that the economy was already slowing: household spending was subdued, the labor market had softened and the housing market had weakened.
Josh Gilbert, a market analyst at eToro, also expected another increase after the release and said borrowers could face a prolonged wait for rate relief.
The central bank’s next monetary policy decision is scheduled for 3 November 2026. Most economists cited in the Guardian’s 28 October report expected an increase; the bank has yet to announce that decision.
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