Australian Annual Inflation Hits 4.3% in September as November Rate Decision Looms
Key Facts
Australia’s consumer price index rose 4.3% in the 12 months to September, compared with 4.0% in August, according to data released by the Australian Bureau of Statistics on October 28, 2026. The data showed an acceleration in the annual increase, while the quarterly index rose 1.3% in the September quarter. The trimmed mean, a measure of underlying inflation, also rose to 3.6% annually from 3.5% in August, after the previous month’s reading was revised down from 3.6%. These readings put prices at the forefront of attention ahead of the Reserve Bank of Australia’s meeting scheduled for November 2 and 3. The bank will release its decision and monetary policy statement on November 3, while the official data did not substantiate the rate-hike probability figures included in the previous draft.
On a monthly basis, the consumer price index rose 0.8% in September on an original basis and 0.6% after seasonal adjustment, according to the bureau. The trimmed mean recorded a seasonally adjusted monthly increase of 0.3%. Quarterly inflation was 1.3% for the headline index and 1.0% for the trimmed mean, using the basis the bureau employed before October 2025. These readings show that September’s acceleration was not limited to the annual comparison, as monthly and quarterly indicators also recorded increases over the same period. The official data do not include market forecasts that can be documented for comparison with these results.
Transport was the largest spending group exerting upward pressure in the September reading, with prices rising 8.7% year on year, while housing prices increased 5.2%, according to bureau data. Automotive fuel prices rose 9.4% in September, following a 14.8% increase in August, which the bureau attributed to rising global oil prices. In August, fuel prices recorded a monthly jump of 14.8%, according to Reuters’ coverage of the bureau’s data. The fuel and transport figures highlight an important part of the pressures recorded in September, while housing costs also remained elevated. In another component, new dwelling prices rose 4.7% year on year in September, compared with 5.4% in August, as builders passed higher materials and labor costs on to prices.
Annual inflation rose to 4.6% in March 2026, then slowed to 3.5% in July before reaching 4.3% in September, according to the series published by the bureau. The Reserve Bank of Australia sets an annual inflation target range of 2% to 3%. In forecasts published in August, the bank said inflation was not expected to return to the midpoint of that range before early 2028. ANZ Bank analysts said inflation risks linked to oil prices, the AI boom and domestic capacity constraints were “crystallising,” and forecast a 25-basis-point rate hike in November. That forecast is attributed to the bank’s analysts, while the available evidence did not document market estimates for the probability of a hike included in the first draft.
In the stock market, the S&P/ASX 200 ended Wednesday’s session on October 28 down 2.8 points, or 0.03%, at 8,847.3 points, after trimming its early gains, according to market data. Eight of the 11 sectors closed lower. This result differs from the previous draft’s report of a 0.2% rise in the index, and the available evidence also does not support linking the market move to the estimated 85% probability of a rate hike. Investors are awaiting the producer price indexes for the quarter ended in September, due on October 30 at 11:30 a.m. Australian Eastern Time. The Reserve Bank will then release its decision and monetary policy statement on November 3 at 2:30 p.m., followed by a press conference at 3:30 p.m. The consumer price index for October is due on November 25.