SYDNEY — Australia’s annual inflation rate jumped to 4.0% in the year to August from 3.5%, stoking fears the Reserve Bank will raise interest rates again before Christmas after lifting the cash rate to 4.6% — its fourth increase of 2026, The Guardian reported citing Australian Bureau of Statistics figures.
Treasurer Jim Chalmers blamed higher global oil prices tied to the Middle East conflict for the rise, noting fuel prices surged 15% last month after the government ended a fuel-excise cut. Underlying inflation held at 3.6%, still well above the RBA’s 2.5% target. Home building costs rose 5.4% over 12 months as builders passed on higher materials and labour costs, the ABS said.
EY chief economist Cherelle Murphy said another rate hike looked likely by year-end. RBA Governor Michele Bullock said the previous day that inflation was “too high” and driven by domestic capacity pressures, while also pointing to the Middle East conflict and AI-related data-centre spending. Both headline and underlying measures remained above target despite the rise being slightly less than economists had anticipated.
Sources: The Guardian, ABC News Australia
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