Australia's inflation accelerates to 4.3%, raising rate hike prospects

Summarised from 2 outlets · Updated 28 Oct, 00:57 · Archive

Australia's inflation rate has risen to 4.3%, with underlying inflation at 3.6%, increasing expectations of another interest rate rise.

Australia's headline inflation rate has accelerated to 4.3%, with the Reserve Bank's preferred measure of underlying inflation at 3.6% annually to September. The trimmed mean, which strips out volatile price movements, rose to 3.7 per cent on an annual basis, exceeding economists' forecasts and remaining above the central bank's 2 to 3 per cent target range. This marks the highest level for underlying inflation since March.

Most economists expect the Reserve Bank to raise interest rates again when it meets on 3 November. The official cash rate already stands at 4.6%, its highest level in 15 years, after four increases this year. Reserve Bank officials have strongly indicated the board may need to lift borrowing costs further to drag price growth back toward its 2.5% target, citing concerns of a 'materially worse' inflation outlook.

The figures cast fresh doubt on previous government claims that Australia's inflation problem had largely been defeated. In January 2025, Treasurer Jim Chalmers declared that the country had 'turned a corner on inflation' and that the economy was on track for a 'soft landing'. The acceleration in inflation comes at a time when unemployment is also rising, intensifying pressure on household budgets and fuelling political discontent over cost of living pressures.

How it is being reported

• Aussie homeowners brace for more mortgage pain as inflation accelerates againInflation has accelerated again despite four interest rate rises this year, keeping pressure on the Reserve Bank to rise rates again at its meeting next week.Daily Mail · 28 Oct, 00:37
• Australia’s inflation rate rises to 4.3%, fuelling fears of fifth interest rate hike this yearCPI release comes ahead of Reserve Bank decision next week as the Middle East conflict intensifies the cost of living crisis Australia’s headline inflation rate has accelerated to 4.3%, with a key gauge that strips out volatile prices also elevated, sharpening expectations of another interest rate rise next week. The Reserve Bank of Australia’s preferred measure of consumer prices, called underlying inflation, came in at an annual 3.6% to September. Continue reading...Guardian World · 28 Oct, 00:36

In this story: Australia · Reserve Bank of Australia · Jim Chalmers · Australian Bureau of Statistics

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