Australian inflation rises to 4.0% as cash rate reaches 4.60%

Australia's Consumer Price Index rose 4.0% over the 12 months to August 2026, up from 3.5% in July, according to the Australian Bureau of Statistics.

The ABS said CPI increased 0.4% in original terms during August and 0.7% after seasonal adjustment. Trimmed mean inflation, a measure that reduces the influence of unusually large price changes, remained at 3.6% over the year.

The figures followed the Reserve Bank's decision on 29 September to lift the cash rate target by 25 basis points to 4.60%. The RBA said inflation remained elevated and cited higher global energy prices alongside continuing pressure on domestic capacity.

For households, higher inflation can increase the cost of essentials, while the rate rise may lift borrowing costs for variable-rate loans. Individual outcomes depend on lenders, contracts and spending patterns.

Sources: Australian Bureau of Statistics; Reserve Bank of Australia.

Image disclosure: The featured image is an AI-generated editorial illustration representing household cost pressures. It is not a photograph of a specific household or official document.