Australian Inflation Rises to 4.3% Ahead of Central Bank Meeting on November 2–3

Key Facts

Australia’s consumer price index rose to 4.3% in the twelve months to September 2026, from 4.0% in the period to August, according to the Australian Bureau of Statistics. The reading comes ahead of the Reserve Bank of Australia’s Monetary Policy Board meeting scheduled for November 2 and 3. Headline inflation rose 0.8% in September on a monthly basis, according to the Australian Broadcasting Corporation. The trimmed mean measure of underlying inflation, which the central bank monitors, recorded a quarterly increase of 1.0% in the September quarter. The measure stood at 3.6% annually, compared with August’s reading, revised down to 3.5%.

The figures highlight a divergence between the headline index and the underlying measure, with the former rising to 4.3% annually and the latter reaching 3.6%, according to Bureau of Statistics data. The Australian Broadcasting Corporation said the quarterly underlying reading, which is “relevant to monetary policy,” rose 1.0% in the three months to the end of September. It added that the underlying reading came in above the central bank’s previous forecasts. In the labor market, the unemployment rate was 4.7% in September, its highest level in five years, according to a Reuters report published on October 15. The November meeting puts policymakers before inflation data higher than the August reading, alongside an unemployment rate the report described as the highest in five years.

Market expectations for an interest rate increase shifted during October as data and statements were released. On October 21, Deputy Governor Andrew Hauser said inflation expectations had worsened, while Reuters reported that markets were pricing in a probability of about 50% of a rate increase by December. A week later, ahead of the inflation data release, the Australian Broadcasting Corporation reported that the chance of a rate increase in November had exceeded 60%. After the data were published on October 28, the Australian dollar was at 70.42 U.S. cents, according to the broadcaster. The same report said the inflation data included a 0.8% rise in the headline index in September and a 1.0% increase in trimmed mean inflation during the quarter.

In its forecasts published in August, the Reserve Bank of Australia said inflation would not return to the midpoint of its target range before early 2028. The bank then kept the cash rate at 4.35%, after three increases since the start of the year, according to its monetary policy report. On October 21, Reuters said the board would consider whether to raise the 4.60% interest rate for the fifth time during 2026. The central bank’s schedule set the Monetary Policy Board meeting for November 2 and 3. The public schedule did not specify the day the decision would be announced or when the statement and press conference would be held.