Australia inflation hits 4.3%, November rate rise expected
Australia's headline inflation accelerated to 4.3% as the Reserve Bank prepares for its 3 November policy meeting.
At a glance
- Australia's headline inflation rate rose to 4.3% for the year to September.
- The Reserve Bank's cash rate is at 4.6%, its highest in 15 years, after four hikes in 2026.
- The RBA board meets on 3 November, and most economists expect another interest rate increase.
Australia’s headline inflation rate has accelerated to 4.3%, increasing pressure on the Reserve Bank of Australia to raise interest rates again next week.
The Australian Bureau of Statistics released the consumer price index figures on Wednesday, showing the annual rate climbed to 4.3%. The Reserve Bank’s preferred underlying inflation measure stood at 3.6% for the year to September.
The central bank’s cash rate is already at 4.6%, its highest level in 15 years, following four increases in 2026. The RBA board is scheduled to meet on 3 November, and most economists are expecting another cash rate rise.
Reserve Bank deputy governor Andrew Hauser told Senate estimates on Wednesday that the inflation numbers were "too high." He warned of a "nightmare" risk that longer-term inflation expectations could become entrenched, making price growth harder to bring down.
Cost-of-living pressures
Transport costs rose 8.7% over the past year, largely because of higher fuel prices linked to the conflict involving the US, Israel and Iran. Food prices increased 3.2% annually, while housing costs climbed 5.2%. Housing was the largest contributor to annual inflation, according to the bureau. The figures also showed everyday goods and services becoming more expensive at the same time as unemployment was rising.
Treasurer Jim Chalmers said high oil prices and a recovering private sector were the main drivers of the rise, and called for an end to the war in the Middle East. Critics have also pointed to government spending and weak productivity as factors in the cost-of-living squeeze. Chalmers said his government accepted its part in fighting inflation.
Outlook
Stephen Smith of Deloitte Access Economics said the RBA had little appetite for inflation expectations to drift higher after a prolonged period above target. He noted that household spending was subdued, the labour market had softened and the housing market had weakened. Josh Gilbert, a market analyst at eToro, said another rate increase looked imminent.
Source: The Guardian World.
Questions and answers
- What is Australia's current inflation rate?
- The headline consumer price index rose to 4.3% annually, while the Reserve Bank's underlying inflation measure was 3.6% for the year to September.
- When will the Reserve Bank of Australia next decide on interest rates?
- The RBA board is scheduled to meet on 3 November, with most economists expecting another cash rate increase.
- Why did Australia's treasurer cite the Middle East war as a factor in inflation?
- Jim Chalmers said high oil prices linked to the conflict were a main cause of the inflation rise and called for an end to the war.
