Australia’s Consumer Price Index increased 4.0% over the 12 months to August 2026, up from annual growth of 3.5% in July. As per data shared by the Australian Bureau of Statistics (ABS) and released on 30 September 2026, housing was the largest contributor to annual inflation, while transport was the second-largest contributor.

The August data showed that price increases remained broad across several household expenditure categories. Housing costs rose 5.7% over the year, while transport prices increased 5.6%. The result also reflected a sharp monthly rise in automotive fuel prices.

Housing Makes the Largest Contribution

Housing recorded annual inflation of 5.7% in August.

The increase reflected higher prices for both new dwellings and electricity. New dwelling prices rose 5.4% over the 12 months to August, with higher construction materials and labour costs being passed through to consumers.

Housing therefore remained the largest contributor to the annual CPI movement during the month.

The increase in new dwelling prices formed part of the broader rise in housing-related costs recorded over the year. Electricity prices also contributed to the annual increase.

Transport Prices Rise 5.6%

Transport was the second-largest contributor to annual inflation, increasing 5.6% over the year to August.

Higher automotive fuel prices were the main factor behind the increase.

On a monthly basis, automotive fuel prices rose 14.8% in August, following a 7.5% increase in July.

The August movement reflected higher world oil prices as well as the unwinding of the remaining federal fuel excise relief measures during the month.

The increase in fuel prices therefore had a noticeable effect on the headline CPI result.

Fuel Prices Lift Headline Inflation

Automotive fuel was one of the major items influencing the difference between headline inflation and underlying inflation during August.

The ABS reported that automotive fuel and electricity were both excluded from the trimmed mean measure during the month because of their relatively large price movements.

The trimmed mean measure is designed to reduce the effect of large temporary price changes and provide another measure of underlying inflation conditions.

While headline annual CPI inflation increased to 4.0%, annual trimmed mean inflation remained unchanged at 3.6%.

Trimmed Mean Inflation Holds at 3.6%

Annual trimmed mean inflation remained at 3.6% for the third consecutive month in August.

This contrasted with the increase in headline annual CPI inflation from 3.5% in July to 4.0% in August.

The difference between the two measures reflected the impact of larger price movements in automotive fuel and electricity.

The August figures therefore showed headline inflation increasing while the trimmed mean measure remained steady.

August CPI Shows Different Price Movements

The latest CPI data showed differing movements across individual expenditure groups.

Housing remained the largest annual contributor, supported by higher new dwelling and electricity prices. Transport also contributed significantly because of higher automotive fuel prices.

The monthly increase in fuel prices was particularly notable, with the 14.8% August rise following another increase in July.

At the same time, trimmed mean inflation remaining at 3.6% showed that the underlying measure was unchanged for the third month in succession.

Key Takeaway

Australia’s CPI increased 4.0% over the year to August 2026, compared with 3.5% annual inflation in July.

Housing was the largest contributor, rising 5.7%, while transport increased 5.6%. New dwelling prices rose 5.4% over the year, while automotive fuel prices increased 14.8% during August alone.

Annual trimmed mean inflation remained unchanged at 3.6%, with automotive fuel and electricity among the large price movements excluded from the measure.