Australian Inflation Rises to 4.0%, Rates at 4.60% Ahead of November Decision

Key Facts

Australia's annual inflation accelerated to 4.0% in August, according to the Australian Bureau of Statistics, as the Reserve Bank of Australia prepares to announce its next monetary policy decision in November. Consumer prices had risen 3.5% in July before the pace of increases accelerated the following month. The central bank raised its target interest rate by 25 basis points in its September decision, according to its monetary policy statement. The increase took the interest rate to 4.60%, with pressures the bank identified in labour costs and goods prices persisting. The drivers cited by the central bank included oil prices above the assumptions underlying its forecasts, alongside artificial intelligence-related demand for technology goods.

In the consumer price breakdown, annual trimmed mean inflation stood at 3.6% in August, according to the Australian Bureau of Statistics. The measure was unchanged from July, while headline inflation accelerated over the same period. The Reserve Bank of Australia's August Statement on Monetary Policy had forecast that trimmed mean inflation would remain above 3% until mid-2027. The statement then projected a decline to 2.5% by early 2028, along the price path the bank outlined in its forecasts at the time. The timeframe for trimmed mean inflation to remain above 3% thus extended into the following year, before the decline projected in the statement through early 2028.

On external pressures, the minutes of the September monetary policy meeting noted the widening conflict in the Middle East and oil prices above the levels assumed in the bank's forecasts. The minutes said oil prices were "much higher than assumed in the forecasts", linking this to the widening conflict. In its rate decision statement, the bank also identified artificial intelligence-related demand as a driver of the global acceleration in prices of technology-related goods. On labour costs, the September minutes attributed rising unit labour costs to weak productivity growth. That assessment accompanied the minutes' observation that housing prices had fallen more than the central bank had expected.

In the labour market, the seasonally adjusted unemployment rate rose to 4.7% in September, according to the Australian Bureau of Statistics. The monthly increase was 0.1 percentage points, according to that month's labour force report. Seasonally adjusted employment also fell by 39,300 people, a monthly decline recorded in the September data. When releasing the report, the statistics bureau advised caution in interpreting short-term changes in the labour market. These developments followed September's rate increase, with trimmed mean inflation remaining at a level the bank had projected in its previous statement would take until early 2028 to decline.

Official events in late October precede the next monetary policy decision, including a new consumer price release and a scheduled appearance by the bank before the Senate. The Australian Bureau of Statistics lists 28 October 2026 as the release date for September's consumer price report. The release will cover the month in which the central bank made its latest decision to raise the target interest rate. On the same day, the bank's schedule lists an appearance before the Australian Senate's Economics Legislation Committee. Both events follow the August price data and September labour force data, and precede the scheduled announcement of the next monetary policy decision.

The next monetary policy decision statement is scheduled for release on 3 November 2026, according to the Reserve Bank of Australia's calendar. The bank has set its publication time at 2.30 p.m. Australian Eastern Daylight Time. The September inflation report will be released beforehand, after the August reading showed a rise in headline inflation and an unchanged trimmed mean measure. The decision also follows the bank's scheduled appearance before the Senate economics committee in late October. September's decision to raise the interest rate to 4.60% remains the latest documented monetary policy decision ahead of these dates.