Australia's inflation hits 4.3%: will the RBA raise interest rates again?

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Australia’s annual inflation accelerated again. The Australian Bureau of Statistics released Consumer Price Index, Australia, September 2026 at 11:30am AEDT on 28 October. In the 12 months to September, the headline CPI rose 4.3%, up from 4.0% in the year to August. Annual trimmed mean inflation was 3.6%, up from a revised 3.5% in August.

That is the last major inflation print before the Reserve Bank of Australia announces its next cash-rate decision at 2:30pm on Tuesday 3 November 2026. The cash rate target is already 4.60%, effective 30 September, after a unanimous 0.25 percentage point rise on 29 September.

This is a dated broker note, not an RBA forecast. I am a mortgage broker at Azure Home Loans, not a Board member and not an accredited economist. The Board may hold or raise. The useful work this week is knowing the rate already on your loan, and whether a 0.25 percentage point move still fits your budget.

Charts below use the official ABS tables. Monthly figures are labelled separately from annual ones.

Australia's inflation problem is not over

Headline CPI is the all-items basket. Trimmed mean drops the items with the largest and smallest price changes so the Board can see whether inflation is broad, not just a few noisy prices. Both rose in September. Both sit above the 2–3% target.

A monthly move is not a year. In original terms the CPI rose 0.8% in September. Seasonally adjusted, the monthly rise was 0.6% and monthly trimmed mean was 0.3%. Seasonally adjusted annual CPI is 4.4%. That is not the standard headline. The figure the ABS leads with — and the one used here — is 4.3%.

Inflation slowing is not prices falling. A 4.3% annual reading means the typical basket is still more expensive than a year earlier. Mortgage holders feel that in groceries, fuel, insurance and rent even when the cash rate is unchanged.

August trimmed mean was not unchanged. The September release revised August to 3.5% because seasonal factors were updated. Treat the new table as the current record.

What is driving inflation?

Housing contributed about 1.14 percentage points to the 4.3% annual rise. Transport contributed about 0.99 points. Those are contributions, not the same thing as the annual price increases of 5.2% and 8.7%.

Fuel and global energy costs

Automotive fuel rose 23.6% over the year and 9.4% in the month, on higher world oil prices. That is a large imported shock. It does not explain the rest of the print on its own.

Housing and construction

The housing group rose 5.2% annually. New dwelling construction was up 4.7% over the year as project builders passed through labour and materials costs. In September itself, new-dwelling prices were unchanged (0.0%): some builders raised base prices; others increased discounts as new demand slowed.

Housing CPI is not the sale price of existing houses. It is a consumer-price group: new dwellings, rents, electricity and rates.

Rental inflation

Rents rose 3.6% over the year — unchanged since May — and 0.2% in the month. Commonwealth Rent Assistance was indexed on 20 September. Excluding that, the ABS says rents would have risen 0.3% over the month.

Electricity and rebate effects

Electricity rose 12.8% over the year, largely because Commonwealth electricity rebates ended. That is a level shift in household bills, not a new construction boom.

Services and domestic cost pressure

Services inflation was 4.1% annually; goods 4.6%. Non-tradables — prices set more at home — were 4.5%. Tradables were 4.0%. Non-discretionary inflation was 5.2%. Food rose 3.2%, recreation and culture 4.5%, insurance and financial services 3.9%. Persistent services and non-tradables inflation cannot be blamed only on imported oil.

On 21 October, Deputy Governor Andrew Hauser said the inflation outlook looked materially worse than the August forecasts and that oil was about a third higher than assumed then. That is published commentary, not a November vote. Read the speech.

Why the RBA faces a difficult decision

The Board has two objectives: inflation between 2 and 3%, and sustained full employment. Hauser called that a world of hard choices. I will not pretend the answer is obvious.

Arguments that could support another increase

• Underlying inflation is still above target.
• Non-tradables remain elevated.
• Services prices are still rising at 4.1% annually.
• If households and firms start treating 3–3.5% as normal, bringing inflation back later is more expensive. That is a risk, not proof that expectations have already broken.

Arguments that could support a hold

• Policy has already been tightened several times this year. The cash rate is 4.60%.
• September Labour Force showed seasonally adjusted unemployment at 4.7% and employment down 39,300. Trend unemployment is still 4.6% — the ABS preferred underlying read. See our jobs playbook.
• Housing activity and household cash flow are already under pressure.
• Rate rises work with a lag. Another 25 basis points today is felt later.
• Part of the headline — fuel and the rebate roll-off — is supply-driven. Monetary policy cannot drill for oil.

The Board may hold at 4.60% or raise. I am not assigning a probability.

The potential interest-rate scenarios

These are planning cases, not a path the Bank has promised.

• Hold at 4.60%. Variable rates stay where lenders set them after the September rise. Your October notice still matters.
• A 25-basis-point rise to 4.85%. Lenders may pass some, all, or none of that through, and not on the same day.
• Higher for longer into 2027. Even a hold can leave repayments elevated if inflation stays above target.
• Eventual cuts only if underlying inflation and activity allow. Do not budget as if a cut is booked.

Confirm dates on the RBA meeting calendar.

What a 0.25% rate increase costs mortgage holders

Illustration only: principal and interest, 30 years remaining, no offset, a full 0.25 percentage point rise in the loan rate from 6.25% to 6.50%. Rounded. Your rate, term, offset and lender pass-through will differ.

Run your own balance on the mortgage repayment calculator. Eligibility, rates and conditions vary. Approval is never guaranteed.

Is your home loan still competitive?

Interest rates and lender pricing can change independently of the RBA. A home loan review can help you understand your current options, potential costs and whether refinancing may be worthwhile.

Review my home loan · Call 0400 77 77 55

What does inflation mean for Australian house prices?

Inflation does not automatically lift property values. Higher consumer prices can cut borrowing capacity once lenders apply their serviceability buffer, and higher repayments reduce how much a buyer can bid. If demand cools while new-dwelling costs stay high, that is a supply story, not a capital-growth promise.

Rents in the CPI are the cost of occupying a dwelling, not an auction result. Investor cash flow still depends on the loan, vacancies and tax. Use the investment lending page and the usable equity calculator if you are testing a draw. Existing-home prices can fall while CPI housing inflation is still high. Those series answer different questions.

Melbourne versus other capital cities

Melbourne’s annual CPI was 4.0%, below the 4.3% national average. Sydney matched the national 4.3%. Brisbane 4.4%, Perth 4.5%, Canberra 4.7%, Adelaide 5.0%, Darwin 5.2%, Hobart 5.3%.

Melbourne’s housing group rose 3.8%, against 5.2% nationally. That does not mean Melbourne house prices will fall, or that Sydney’s will rise. City CPI is the local consumption basket. It is not a capital-growth forecast.

First-home buyers still need state grant and duty rules, not a CPI league table. Start at the first home buyer guide.

Should you refinance or review your home loan now?

Do not wait solely for an RBA cut. Lender pricing moves on its own calendar. A refinance can make sense when the term-for-term maths works after fees. It can also fail if a lower rate resets you to 30 years.

Review, in writing:

• the rate you actually pay versus options you can qualify for
• owner-occupier versus investment purpose, and LVR
• usable equity and whether drawing it is cheaper than a separate loan
• offset value versus a rate cut that kills the offset
• extra-repayment and redraw rules
• refinance costs, break costs and any fixed-rate expiry
• remaining term and lifetime interest, not only the monthly figure

This is general information. It is not a recommendation to refinance, fix, or stay. Speak with a broker before you act. Use the refinance playground for term-for-term maths.

My assessment — what happens next?

Inflation is still too high for a target of 2–3%. The risk of further tightening is real. The softer September jobs print complicates that risk. A long stretch of restrictive rates is plausible even if 3 November is a hold.

Plan the repayment you have, and the repayment you could face at +0.25%. Do not plan on an imminent cut. That is my reading of the public data as at 28 October 2026. It is not an official RBA forecast and it is not personal credit advice.

Don't wait for an RBA rate cut to review your mortgage.

Get your current loan reviewed and understand what options may be available based on your circumstances.

Request a home loan review · Call 0400 77 77 55

Azure Home Loans Pty Ltd. Credit Representative 538895, authorised under Australian Credit Licence 390261. ABN 77 676 207 131. This article is general information only and does not constitute personal financial, credit or investment advice. Lending eligibility, rates and conditions vary. Information is current as at 28 October 2026.

Frequently asked questions

What is Australia's inflation rate in September 2026?

Annual headline CPI was 4.3% in the 12 months to September 2026, up from 4.0% in the year to August. Annual trimmed mean inflation was 3.6%. Confirm on the ABS September 2026 CPI release.

What is trimmed mean inflation?

It is an underlying measure that removes the items with the largest and smallest price changes. The RBA uses it to judge whether inflation is broad. It is not the same as the older quarterly trimmed-mean series in Appendix 1a.

Will the RBA increase interest rates in November 2026?

This page does not call the 3 November vote. The cash rate is 4.60% until the Board changes it. The September decision said the Board would increase the cash rate further if needed.

How much could a 0.25% rate increase add to repayments?

On the illustration above — 30-year P&I, no offset, 6.25% to 6.50% — about $82 a month on $500,000 and about $164 on $1 million. Actual results vary.

Should I refinance before the next RBA decision?

Not automatically. Compare written retention with a term-for-term refinance, including fees. A cash-rate day does not freeze your lender’s price list.

Does high housing inflation mean house prices are rising?

No. Housing CPI includes new dwellings, rents, electricity and rates. It is not the established-house price index.

Sources and methodology

• ABS, Consumer Price Index, Australia, September 2026, released 28 October 2026. Annual and monthly movements, groups, capital cities, analytical series. Accessed 28 October 2026.
• ABS, Labour Force, Australia, September 2026. Accessed 28 October 2026.
• RBA, Cash rate target overview — 4.60% from 30 September 2026; next update 2:30pm, 3 November 2026. Accessed 28 October 2026.
• RBA, Monetary Policy Decision, 29 September 2026 (media release 2026-27).
• RBA, Fireside chat by Andrew Hauser, 21 October 2026.
• Repayment table: standard monthly amortisation, 30-year remaining term, no offset, rates 6.25% and 6.50%. Rounded. Not a lender quote.

Related reading: 29 September cash-rate rise, September jobs playbook, how much equity you can borrow.