Australian Inflation Rises to 4.3% in September, Trimmed Mean Reaches 3.6%
Key Facts
Australia’s consumer price index rose 4.3% in the twelve months to September, up from 4.0% in the twelve months to August, according to the Australian Bureau of Statistics. On a monthly basis, the index increased 0.8% in the original series, while the rise was 0.6% after seasonal adjustment. The seasonally adjusted annual change was 4.4%. The trimmed mean, a measure of underlying inflation, was 3.6% year on year in September, up from August’s revised reading of 3.5%, from 3.6%. Prices are accelerating as the Reserve Bank of Australia prepares to issue its next monetary policy decision on November 3.
Third-quarter data show price pressures extending beyond the monthly reading: the consumer price index rose 1.3% quarter on quarter, compared with 0.6% in the previous quarter, according to data cited by Reuters. The trimmed mean increased 1.0% during the quarter, exceeding the bank’s forecast of 0.8%. On an annual basis, the quarterly trimmed mean was 3.7% in the third quarter, compared with 3.6% in the previous reading. Goods prices rose 4.6% year on year, while services prices increased 4.1%, with services up 1.3% in the month. The annual consumer price index also accelerated from 3.6% in September 2025 to 4.3% in September 2026, while the trimmed mean rose from 3.2% to 3.6% over the same period.
By category, housing prices rose 5.2% in the twelve months to September, slowing from 5.7% to August. The main annual contributions within housing came from new dwellings, electricity and rents, whose prices rose 4.7%, 12.8% and 3.6%, respectively, the bureau said. New dwelling prices rose 4.7% year on year, compared with 5.4% to August, but were unchanged in September. The bureau attributed the annual increase to home builders passing higher labour and material costs on to prices. This places the slowdown in new dwelling prices alongside continued increases in electricity and rents among the components of housing inflation.
Transport recorded an annual increase of 8.7% to September, with automotive fuel prices the largest contributor to the category’s rise, increasing 23.6% year on year. In September alone, fuel prices rose 9.4%, which the bureau attributed to higher global oil prices. Inflation in food and non-alcoholic beverages also accelerated to 3.2% year on year from 3.0% in August, with meals out and takeaway food the main contributor, rising 3.9%. Recreation and culture prices increased 4.5% in the twelve months to September. Domestic travel and accommodation were the largest contributor to the category; it also rose 3.8% in the month as domestic travel and accommodation increased 8.0%.
The Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.60% on September 29, in a decision taken unanimously by the monetary policy board. The bank said inflation remained elevated and that some of the upside inflation risks it had flagged in August had “begun to materialise.” It added that the widening conflict in the Middle East had pushed global energy prices higher than assumed in its August forecasts. It also said demand related to artificial intelligence was driving rapid growth in global technology goods prices. On October 21, Deputy Governor Andrew Hauser said the inflation outlook was “materially worse” than the bank had expected in its August report, citing oil prices about a third higher than the bank’s projection assumptions.
After the September data were released, Hauser described the inflation figures as “very high,” according to The Guardian, and said the risk of higher long-term inflation expectations remained. A report published by the newspaper on October 28 said most of the economists it cited expected another rate increase at the decision scheduled for November 3; those expectations were attributed to economists and were not an announced bank decision. In Asian trading on October 28, the Australian dollar rose to its highest level since September 23, approaching the 0.7050–0.7055 U.S. dollar range after the inflation data were released. The Australian dollar against the U.S. dollar closed at 0.70313 on October 27, compared with a close of 0.70156 the previous day. The Australian Bureau of Statistics set November 25 at 11:30 a.m. Australian Eastern Time as the release date for the October consumer price index.