Australian Inflation at 4.0% as Central Bank Warns of Worsening Price Outlook Ahead of September Data
Key Facts
Reserve Bank of Australia Deputy Governor Andrew Hauser warned during a discussion in Sydney in October that the inflation outlook had deteriorated compared with the bank's August projections, after annual consumer price inflation reached 4.0% in August 2026. Hauser said "the inflation outlook looks much worse than we expected in the August report," in an assessment combining persistent price pressures with weakness in some areas of economic activity. Australian Bureau of Statistics data showed inflation rose from 3.5% in July, placing the monetary official's warning after an acceleration in annual price growth. During the same discussion, Hauser described easing pressure in the labour market, saying "the labour market is seeing pressures ease." He added that "consumption growth is relatively weak," placing weak consumer spending alongside easing labour market pressures in his description of economic conditions.
Australia's Monetary Policy Board decided at its September meeting to raise the target interest rate by 25 basis points. The increase brought the rate to 4.60%, according to meeting minutes published by the Reserve Bank of Australia. The bank said in the minutes that the board decided on the increase "unanimously," noting that its members agreed on the move at that meeting. On economic activity in the same month, Australia's composite purchasing managers' index stood at 51.3 points, according to S&P Global analysis published in October, a reading that indicated a modest increase in private-sector activity. It was the index's lowest reading in 3 months, putting September's activity growth at its weakest over that period.
In manufacturing, the final reading of Australia's purchasing managers' index stood at 49.6 points in September 2026, according to Investing.com's economic calendar data. That compared with a reading of 52.0 points in August, marking a decline between the two months. According to S&P Global's analysis, Australian factory output contracted in September at the fastest pace in 21 months. Weak output coincided with price pressures identified in the company's survey for the same month, which it attributed to energy prices and supply constraints. The company said those pressures were "driven by energy prices and supply constraints," with the survey results combining declining industrial output and persistent factors pushing up business costs.
In global markets, U.S. stocks fell in the 22 October 2026 session, with the S&P 500 index dropping 1.2%, according to the Associated Press. It was the index's worst daily performance since July, according to the agency's coverage of the session. The Nasdaq Composite fell 2.6%, exceeding the broader index's percentage decline on the same day. In energy markets, the Associated Press reported that oil prices reached their highest levels since May in its coverage of the 22 October session. The agency attributed oil's rise to concerns over war with Iran, as rising energy prices coincided with losses in U.S. stock indexes.
The Australian Bureau of Statistics will release the consumer price index for September 2026 on 28 October, according to its official release calendar. The bureau scheduled publication for 11:30 a.m. Australian Eastern Daylight Time. The release is titled "Consumer Price Index, Australia" and covers price movements during September. Following the inflation release, the next update on Australia's interest rate decision is scheduled for 3 November 2026, according to the calendar published by the Reserve Bank of Australia. The bank set 2:30 p.m. as the time for the announcement, placing September's price data ahead of the next monetary policy decision.