Key Highlights

  • Annual headline CPI rose to 4.3 per cent from 4.0 per cent, and the monthly rise was 0.8 per cent in original terms.
  • The trimmed mean was 3.6 per cent annually, up from a revised 3.5 per cent, with CPI excluding volatile items at 3.7 per cent.
  • Fuel rose 23.6 per cent and electricity 12.8 per cent over the year, while goods inflation was 4.6 per cent and services 4.1 per cent.

The Australian Bureau of Statistics' September CPI showed annual headline inflation accelerating by three-tenths of a percentage point, with fuel and electricity doing much of the heavy lifting.

At 11.30 am (AEDT) on 28 October 2026, the Australian Bureau of Statistics released the Consumer Price Index for September. The headline number was 4.3 per cent: the rise in prices over the 12 months to September, up from 4.0 per cent in the 12 months to August.

A move of 0.3 percentage points in a single month is significant for an annual rate, and it lands just days before the Reserve Bank's Monetary Policy Board meets on 2–3 November. This article unpacks what drove the jump, which measures moved and which did not, and how the figure sits against the RBA's 2–3 per cent target.

The headline numbers

The ABS release contained several measures that are worth separating clearly:

  • Headline CPI, annual: 4.3 per cent in the 12 months to September, up from 4.0 per cent in August.
  • Headline CPI, monthly: up 0.8 per cent in September in original terms, and 0.6 per cent seasonally adjusted.
  • Trimmed mean, annual: 3.6 per cent, up from a revised 3.5 per cent in August.
  • Trimmed mean, monthly: 0.3 per cent, seasonally adjusted.
  • CPI excluding volatile items: 3.7 per cent annual.

The trimmed mean is the underlying measure, designed to look through the most extreme price movements in any given period. Headline CPI is the full basket. The two should not be confused: 4.3 per cent is headline; 3.6 per cent is underlying.

The ABS noted that the August trimmed mean was revised down from 3.6 per cent to 3.5 per cent because of a change in seasonal factors. That means the September underlying reading represents a rise of 0.1 percentage points on the revised August figure.

The ABS also notes that the monthly CPI is now the complete measure of consumer prices, with quarterly data presented in separate tables.

Fuel: the biggest single mover

The largest contributor was automotive fuel. Fuel prices rose 23.6 per cent over the year to September and 9.4 per cent in the month alone, driven by higher world oil prices, according to the ABS.

That fuel increase helped push the broader Transport group up 8.7 per cent over the year. It also explains much of the gap between the original monthly rise of 0.8 per cent and the more modest trimmed mean monthly rise of 0.3 per cent: the trimmed mean is built to exclude the sharpest moves, and fuel was one of them.

Governor Michele Bullock flagged the energy issue in her opening statement to the Senate Economics Legislation Committee, delivered on the same day as the CPI release. She said that "global energy prices are now much higher than had been assumed in the August forecasts", and that the Middle East conflict has re-escalated.

The second major factor was electricity, which rose 12.8 per cent over the year. The ABS attributed that increase mainly to the end of Commonwealth electricity rebates. When rebates are paid, they lower the measured price households pay; when they stop, the measured price rises.

Electricity sits within the Housing group, which rose 5.2 per cent over the year. Other housing components were more subdued. Rents rose 3.6 per cent over the year and 0.2 per cent in the month, while new dwelling costs rose 4.7 per cent over the year and were unchanged in September.

Tobacco, another category often discussed in inflation reports, rose 8.3 per cent over the year.

Goods and services both running hot

One of the more telling details in the release is that price pressure is not confined to one side of the economy. Goods prices rose 4.6 per cent over the year to September, and services prices rose 4.1 per cent.

Fuel and electricity help explain the goods figure. The services number matters for a different reason: services inflation tends to reflect domestic conditions, such as labour costs and demand, more than global commodity prices. That links back to the RBA's assessment that inflation is being driven partly at home. As the Governor told senators, "we still see inflation arising from domestic capacity pressures."

The measure excluding volatile items, which removes fruit and vegetables and automotive fuel, came in at 3.7 per cent. That is lower than headline, but still well above the top of the target range.

Reading the jump against the RBA's view

The RBA had already signalled concern before this release. In its 29 September statement, the Monetary Policy Board said "Inflation remains elevated and some of the upside risks flagged in August are materialising." In her Senate statement, the Governor said: "Inflation will therefore likely be higher than was our base case in August."

She also noted that "Recently, inflation has been around 3½ to 4 per cent in year-ended terms." The September headline reading of 4.3 per cent is above that range, while the trimmed mean at 3.6 per cent sits within it.

The Governor also told senators that short-term inflation expectations are elevated. At her September media conference, she said: "It's critical that we stop expectations for high inflation from becoming embedded in price-setting decisions".

Assistant Governor (Economic) Sarah Hunter, interviewed on 60 Minutes before the release, said oil-driven price pressure was still coming through and that things would get "a little bit" worse before they improve.

The cash rate target is 4.60 per cent after four increases this year totalling 100 basis points. The Board has said it is open to "increasing the cash rate target further if needed", but it has not made its 3 November decision, and the Governor has said: "I'm not going to give you forward guidance."

The bottom line

September's CPI took annual headline inflation from 4.0 per cent to 4.3 per cent, driven heavily by a 23.6 per cent rise in fuel prices and a 12.8 per cent jump in electricity as rebates ended. The underlying trimmed mean edged up to 3.6 per cent, and both goods and services inflation sit above 4 per cent. All of these figures remain above the 2–3 per cent target. The Board will weigh them, alongside new forecasts in the Statement on Monetary Policy, when it announces its decision at 2.30 pm (AEDT) on 3 November.