EL7.AI
Macro EconomyMedium•30 October 2026•
3 min read

Australian Inflation Hits 4.3% in September, Lifting Rate-Hike Bets to 90%

Key Facts

1Annual inflation reached 4.3% in September, compared with 4.0% in August.
2Headline inflation was 4.3%, above NAB’s 4.2% consensus, while the trimmed mean at 3.6% matched consensus.
3The trimmed mean rose 1.0% in the third quarter and was 3.7% year on year.
4Market-implied odds of a November rate hike rose to about 90% from about 60%.

Australia’s consumer price index rose 0.8% in September from the previous month, or 0.6% on a seasonally adjusted basis, taking annual inflation to 4.3% from 4.0% in August, the Australian Bureau of Statistics said. The annual reading was above the 4.2% market consensus, according to NAB Economics, while annual trimmed mean inflation matched consensus at 3.6%. On a quarterly basis, the consumer price index rose 1.3% in the September quarter, and the trimmed mean increased 1.0%. NAB economists said the quarterly trimmed mean was 3.7% year on year, above the Reserve Bank of Australia’s forecast in its August report. Third-quarter data prompted investors to price in the prospect of monetary policy tightening at the bank’s meeting in November.

Housing was the largest contributor to annual inflation, with prices rising 5.2% in the 12 months to September, according to the statistics bureau. Transport was the second-largest contributor, up 8.7% year on year, alongside a 9.4% rise in automotive fuel prices in September. Fuel prices had risen 14.8% in August, and the bureau attributed the September increase to higher global oil prices. The comparison shows that the monthly increase in fuel prices slowed from the previous month, while fuel remained a notable driver of transport prices. Electricity costs also rose 12.8% year on year, with the bureau saying much of the increase reflected the expiry of government electricity rebates during the year.

Inflation readings varied across state capitals, with the annual rate at 4.0% in Melbourne in September, compared with 5.3% in Hobart, according to bureau data. On underlying inflation, NAB said the trimmed mean excluded the effect of fuel in September, while its quarterly reading remained at 1.0%. Economists at the group said underlying inflation in the third quarter was well above the Reserve Bank of Australia’s August forecast. Before the data were released, the bank’s Deputy Governor Andrew Hauser said the inflation outlook looked “much worse” than the bank had expected. These indicators place the elevated headline inflation reading alongside broad increases in housing, transport and electricity, while the trimmed mean measure remains separate from the effect of fuel.

The data affected interest-rate pricing, with market-implied odds of a November hike rising to about 90% from about 60% before the third-quarter figures, ABC News reported. In a market snapshot at about 4:15 p.m. AEDT on 28 October, the ASX 200 closed unchanged after giving up substantial gains made following the inflation data. The Australian dollar rose 0.1% to 70.32 U.S. cents in the same snapshot. The Reserve Bank of Australia raised its target rate by 25 basis points to 4.60% at its meeting on 29 September. The next milestone is the Monetary Policy Board meeting scheduled for 2 and 3 November, with the decision due on 3 November at 2:30 p.m. AEDT.

NAB economists said the end of surcharging arrangements on payment cards could support measured inflation in October and make it harder for the Reserve Bank of Australia to assess the underlying signal. This comes ahead of the upcoming meeting, with the target rate remaining at 4.60% after September’s increase. After the bank’s decision, the next consumer price index release is scheduled for 25 November 2026 and will cover October data, according to the Australian Bureau of Statistics calendar.