Australian Inflation Accelerates to 4.3% in September as Monthly Index Rises 0.8%
Key Facts
Australia’s consumer price index rose 4.3% in the 12 months to September 2026, up from 4.0% through August, and increased 0.8% in September after rising 0.4% the previous month, according to the Australian Bureau of Statistics. The annual reading shows a fresh acceleration in prices, while the monthly increase followed August’s rise. Annual underlying inflation, the measure preferred by the Reserve Bank of Australia, was 3.6% through September, according to a report by The Guardian. The bank raised its cash rate target in September, making its upcoming November meeting a focus for markets as price pressures persist. The September data do not establish that the bank has settled on the course of its next decision.
Housing was the largest contributor to annual inflation in September, with costs rising 5.2%, according to the head of price statistics at the Australian Bureau of Statistics. Transport was the next-largest contributor, the bureau said. In the 12 months to September, transport costs rose 8.7%, according to The Guardian. The figures put housing and transport at the forefront of price pressures recorded in the annual reading. Together, they show housing as the largest contributor to the index and transport with the higher annual increase of the two figures cited in the report.
In energy details, automotive fuel prices rose 9.4% in September, compared with a 14.8% increase in August, with the Australian Bureau of Statistics attributing the rise to higher global oil prices. This means the monthly pace of fuel price increases was slower than in the previous month, even as prices remained elevated. On housing, prices for new homes rose 4.7% in the 12 months to September, down from 5.4% through August. The Australian Bureau of Statistics said builders passed higher material and labour costs on to new home prices. The slower annual increase in this category therefore coincided with continued growth in overall housing costs, which recorded an annual rise of 5.2%.
The central bank raised its cash rate target by 25 basis points to 4.60% in a decision issued on 29 September, saying the decision was unanimous. In its statement, the bank said some of the upside inflation risks it had flagged in August were beginning to materialise. It added that the widening conflict in the Middle East had pushed global energy prices to levels higher than assumed in its August forecasts. It also said demand related to artificial intelligence was driving rapid growth in global prices for technology goods. These factors put energy and technology goods pressures among the reasons the bank is monitoring the inflation path, while September’s rate increase came before the annual September reading of 4.3%.
Signalling the bank’s view of the price outlook, Deputy Governor Andrew Hauser said on 21 October that inflation expectations were "much worse" than the bank had expected, warning that inflation could become entrenched. Market pricing on that date showed a probability of more than 50% of a November rate hike. That percentage reflects investor pricing at the time, while the bank has not announced its next meeting’s decision. In August, the bank had forecast underlying inflation to remain above 3% through mid-2027 before falling to 2.5% by early 2028. The underlying inflation reading of 3.6% through September comes against that forecast backdrop and does not by itself change the path the bank announced in August.
On activity, the bank said output growth slowed in the June quarter, but was marginally stronger than it had expected. It added that consumer spending growth was set to slow gradually. The Monetary Policy Board will hold its next meeting on 2 and 3 November, according to the bank’s schedule. The Australian Bureau of Statistics has set 25 November 2026 at 11:30 a.m. Australian Eastern Time for the release of the October consumer price index. The next monthly reading is therefore scheduled to be released after the November meeting, according to the bureau’s official calendar.