Australia's inflation rises to 4.0% in August as fuel prices jump 14.8% in a month

Australia's consumer price index rose 4.0% in the 12 months to August 2026, up from 3.5% in July, the Australian Bureau of Statistics reported on 30 September. The release came a day after the Reserve Bank raised the cash rate to 4.60% (report).

The figures

• All groups CPI: +4.0% on the year (July: 3.5%), +0.4% on the month
• Housing: +5.7% on the year, the largest contributor to annual inflation. New dwellings rose 5.4% as builders passed on higher costs for materials and labour, and electricity also rose
• Transport: +5.6% on the year, the second largest contributor, because of higher automotive fuel prices
• Automotive fuel: +14.8% on the month in August, after +7.5% in July
• Trimmed mean: 3.6% on the year, "steady" for a third consecutive month

ABS head of price statistics Rachael McCririck said the monthly fuel rise "was driven by higher world oil prices and the unwinding of the remainder of the federal government's fuel excise relief measures in August."

Why trimmed mean matters

Automotive fuel and electricity were both excluded from the trimmed mean in August, and they were the key drivers of the gap between headline and trimmed mean inflation. The RBA prefers the trimmed mean as a guide to underlying inflation, so its steadiness at 3.6% sits alongside a headline rate that has jumped.

The path this year

The ABS's monthly series shows annual inflation at 4.6% in March, 4.2% in April, 4.0% in May, 3.8% in June and 3.5% in July, before the rise to 4.0% in August, back to May's level and the highest rate since April.

What it means for the RBA and the Australian dollar

The RBA decided before this release and said some upside risks to inflation had started to materialise. Unemployment rose to 4.6% in August (report). For AUD/USD, the question is how the Board weighs a stronger headline rate and steady underlying inflation against a softer jobs market. CPI explained covers headline and underlying measures.

What happens next

September's monthly CPI is published on 28 October, before the RBA's next decision on 3 November.