Key facts
- Housing was the largest contributor to annual inflation in September, rising 5.2%, ABS's Rachael McCririck said.
- Fuel prices rose 9.4% in September, the ABS said, helping drive annual transport inflation higher.
- The trimmed mean rose 1% in the September quarter, against the RBA's August forecast of 0.8%.
- KPMG Australia chief economist Brendan Rynne said the figures were the last data point needed for a fifth hike.
- Betshares chief economist David Bassanese said his base case was a hike next week followed by a hold in December.
- AMP economists said services inflation remained stuck around 4.1% year-on-year.
Australian consumer prices rose more than expected in September, with the monthly consumer price index up 0.8% from 0.4% in August, the Australian Bureau of Statistics said. Annual inflation rose to 4.3% from 4% a month earlier.
Housing was the largest contributor to annual inflation, rising 5.2%, ABS head of price statistics Rachael McCririck said. Fuel prices rose 9.4% in September, helping push annual transport inflation higher. The annual trimmed mean, a measure of underlying inflation that strips out volatile items, picked up to 3.6% from a revised 3.5% in August, and rose 1% in the September quarter against the RBA's August forecast of 0.8%.
After the release, market pricing for a quarter-point increase at the RBA's November meeting rose to about 85%, according to Bloomberg data. KPMG Australia chief economist Brendan Rynne said the figures were the last data point necessary for the RBA to raise the cash rate for a fifth time this year. Betshares chief economist David Bassanese said his base case was a hike next week followed by a hold in December.
RBA deputy governor Andrew Hauser, appearing at a Senate estimates hearing as the data was released, said inflation was broadly in line with the central bank's expectations but was too high. The RBA targets inflation between 2% and 3%. The RBA board begins its meeting on Monday and hands down its decision on Tuesday afternoon, alongside updated economic forecasts.
AMP economists Diana Mousina and Bui wrote in a note to clients that goods inflation had picked up since the second half of 2025 while services inflation remained stuck around 4.1% year-on-year. Health prices rose 3.7% annually, with medical and hospital services up 4.8%.