Australia’s annual inflation rate rose to 4% in August, according to new data from the Australian Bureau of Statistics (ABS).
That is up from the 3.5% inflation rate recorded in July, and marks the first increase since March.
The news comes after the Reserve Bank of Australia (RBA) increased the cash rate yesterday in order to combat high inflation.
Inflation
Inflation measures the change in the prices of goods and services over time.
The most common measure of inflation is the Consumer Price Index (CPI), which tracks the rate of price changes and is typically expressed as an annual rate.
This is often called ‘headline inflation’.
Why the increase?
The main drivers of inflation were housing and transport.
The cost of housing rose by 5.7% in the year to August, which the ABS said was due to increased costs of power bills and new houses.
Your contribution ensures The Daily Aus can continue doing the work you love.
I want to give $10 monthly to help TDA keep doing the news.
Your details:
Transport cost increases were due to higher fuel prices as the Government’s excise discount ended.
Trimmed mean
The ‘trimmed mean’ is an alternative measure of inflation that ignores the most extreme price movements (e.g. a sudden increase in the price of petrol).
The Reserve Bank of Australia (RBA) prefers this measure as it ignores any short-term noise.
The trimmed mean was 3.6% in the 12 months to August 2026, the same as July.
RBA
The news comes after the RBA decided to raise the cash rate to 4.60% yesterday.
The cash rate is the interest rate that banks charge each other for short-term loans, and is the tool used by the RBA to get inflation under control.
The RBA increases the cash rate if inflation is too high and decreases the cash rate if inflation is too low, aiming for an inflation rate between 2 and 3%.
