Key Highlights

  • The monthly headline CPI indicator was 4.3% for the September month of 2026.
  • Quarterly headline CPI was 3.9% over the year to the September quarter.
  • Trimmed mean inflation, the RBA's gauge of underlying inflation, was 3.7%.
  • The three measures are built differently and are not interchangeable.

Australians following the Reserve Bank's November decision have been presented with three different Inflation rates for roughly the same period – and each one answers a slightly different question.

Is inflation 4.3 per cent, 3.9 per cent or 3.7 per cent? All three figures appear in Reserve Bank of Australia (RBA) material published in late 2026, and all three are accurate. They are not competing estimates of the same thing. They measure different periods and, in one case, a different concept of inflation. Knowing which is which makes it much easier to follow what the RBA is saying – and to avoid comparing figures that should not be compared.

4.3 per cent: the monthly headline indicator

The highest of the three is the monthly CPI indicator. The RBA website records annual CPI change of 4.3 per cent for the September month of 2026.

This is a headline measure, meaning it covers the full basket of consumer prices, including volatile items such as fuel. "Annual change" means prices in September 2026 are being compared with prices in September 2025. Because it is based on a single month, it can move around more from one reading to the next than a measure built on a whole quarter.

Its strength is timeliness. The next update, covering October, is due on 25 November 2026, well before the RBA's next cash rate decision on 8 December. That makes the monthly indicator the most current read on price pressures available between Board meetings.

3.9 per cent: the quarterly headline CPI

The middle figure comes from the quarterly CPI. The November Statement on Monetary Policy (SMP) overview states: "Headline inflation was 3.9 per cent over the year to the September quarter".

This is also a headline measure covering the full basket, but it compares the whole September quarter – July, August and September together – with the same quarter a year earlier. Averaging across three months smooths out some of the movement that shows up in a single month. It is not surprising, then, that the quarterly and monthly figures differ: one captures the latest month, the other the quarter as a whole.

The quarterly measure is also the one the RBA uses for its headline forecasts. In the November SMP, headline CPI is forecast at 4.5 per cent for the December 2026 quarter, easing to 3.7 per cent by June 2027, 2.7 per cent by December 2027 and 2.4 per cent by December 2028. The Outlook chapter notes: "Headline inflation is expected to peak at 4.5 per cent in the December 2026 quarter".

3.7 per cent: trimmed mean, the underlying measure

The lowest figure is different in kind. The same SMP sentence continues: "and trimmed mean inflation was 3.7 per cent."

Trimmed mean is a measure of underlying inflation. Rather than including every price change, it sets aside the items with the largest rises and falls in a given period and averages the rest. The aim is to look through one-off or volatile movements – a spike in fuel prices, for example – to the broader trend in prices across the economy.

That makes trimmed mean particularly relevant to the RBA's concern about persistent inflation. Governor Michele Bullock said after the November decision: "It is critical that we stop expectations for high inflation from becoming embedded in price-setting decisions". Underlying measures help gauge whether price rises are spreading beyond a few items.

The November forecasts put trimmed mean at 3.6 per cent in December 2026, 3.5 per cent in June 2027, 2.9 per cent in December 2027 and 2.4 per cent in December 2028. Compared with August, these are higher: the August SMP had forecast 3.3 per cent for December 2026 and 3.0 per cent for June 2027.

Why the gap between them matters

The spread between headline and underlying inflation is informative in its own right. In the September quarter, headline (3.9 per cent) was only a little above trimmed mean (3.7 per cent). The RBA expects that gap to widen in the near term, with headline forecast to reach 4.5 per cent in December 2026 while trimmed mean is forecast at 3.6 per cent.

Energy is one obvious influence on that divergence. The SMP says "The assumed oil price in the December quarter is 35 per cent higher than assumed in August". Higher fuel prices flow straight into headline inflation but have less influence on a trimmed measure.

That distinction is central to how the Board explained its decision. Bullock said: "we are not tightening monetary policy because of the direct impact of oil prices on inflation." The concern was the broader picture – and both measures are forecast to stay high. The SMP overview says: "Headline and trimmed mean inflation are now expected to remain above 3 per cent until end-2027".

A few practical points follow from all this:

  • Comparing a monthly figure with a quarterly figure can make inflation look as if it has jumped or fallen when the two simply cover different periods.
  • A rise in headline inflation driven mainly by fuel may say less about the underlying trend than a rise in trimmed mean.
  • The RBA's forecasts are expressed in quarterly terms, so the quarterly releases are the most direct check on them.

The bottom line

The three numbers describe the same economy from different angles. The 4.3 per cent monthly indicator gives the latest single-month headline reading; the 3.9 per cent quarterly CPI is the headline rate across the September quarter; and the 3.7 per cent trimmed mean strips out the most extreme price changes to show the underlying trend. With the Board having lifted the cash rate to 4.85 per cent on 3 November and stating that "Inflation is now forecast to remain elevated through much of 2027", the October monthly reading on 25 November will be the next data point – and it will be worth reading for what kind of measure it is, not just the number.