Australia's August inflation rises to 4.0%, slightly below expectations
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Australia’s annual inflation rate accelerated to a three-month high of 4.0% in August 2026, up from 3.5% in July, driven primarily by surging transport costs and housing inflation.
The reading came in slightly below market expectations of 4.1%, but moved the Consumer Price Index (CPI) further above the Reserve Bank of Australia’s 2% to 3% target range.
Core inflation metrics held firm during the month, with both the trimmed mean and weighted median CPI remaining steady at 3.6% year-on-year. The trimmed mean reading matched market forecasts and held at its highest level since September 2024.
Food and non-alcoholic beverage price growth eased to 3.0% (down from 3.2%), while clothing and footwear inflation stood at 2.6%.
On a M/M basis, the headline CPI rose 0.4% in August, slowing from July's 1.0% surge and coming in just under consensus expectations of a 0.5% gain.
The benchmark S&P/ASX 200 up 0.2% to 8,726 in Wednesday’s morning trade, marking a third straight gain as consumer durables, tech, and commercial services lifted sentiment, while the Australian dollar fell below $0.70, hitting a nine-week low after August inflation figures undershot forecasts.
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