28 October 2026 · September CPI and Q3 inflation
Inflation has given the RBA little room to relax before its 3 November meeting. September’s headline inflation came in above expectations, while underlying price pressure remains elevated. Further tightening stays on the table, although this release does not settle the decision.
The release versus expectations
| Measure | Actual | Expected | Previous |
|---|---|---|---|
| September headline CPI, annual | 4.3% | 4.2% | 4.0% |
| September headline CPI, monthly | 0.8% | 0.7% | 0.4% |
| September trimmed mean, annual | 3.6% | 3.6% | 3.5%* |
| Q3 trimmed mean, quarterly | 1.0% | 1.0% | 0.8% |
| Q3 trimmed mean, annual | 3.7% | 3.6% | 3.6%* |
Previous figures marked with an asterisk are revised. Monthly and quarterly trimmed-mean readings are separate series.
The detail that matters
Fuel prices jumped 9.4% in September, helping push headline inflation higher. The trimmed mean, which filters out unusually large price movements, gives a clearer view of underlying pressure: quarterly inflation accelerated to 1.0%, exactly as expected. Its annual rate reached 3.7%, slightly above consensus.
Inflation is still uncomfortable, but the quarterly acceleration was already anticipated.
Services inflation also rose, although a sharp increase in domestic holiday costs contributed. That makes it too early to treat every part of the headline rise as persistent domestic pressure.
What this means for the RBA
Before the release, Governor Bullock warned that inflation was likely to exceed the August forecast, with energy costs and domestic capacity pressures both contributing. She also stressed that earlier rate rises have yet to exert their full effect.
Her subsequent comments described upside inflation risks as materialising, while declining to signal the Board’s decision.
My read: this keeps pressure on the RBA to consider another hike. The counterweight is the tightening already delivered and the risk of squeezing demand too far. November remains a live decision.
What this means for AUD
AUD/USD initially gained about 17 pips, from 0.7038 to 0.7055. I’m watching whether Australian interest-rate expectations strengthen relative to those abroad and whether the currency holds its gains.
This release is supportive, but the first jump alone does not confirm that markets have priced in a more aggressive RBA path.
What Invalidates This Thesis
The AUD-supportive view would lose its policy foundation if RBA guidance reduces expected tightening and Australian rate expectations weaken relative to US expectations. A stronger US rate outlook or a sharp deterioration in global risk appetite could also outweigh Australia’s inflation support.
Sources: Australian Bureau of Statistics — September CPI; Reserve Bank of Australia — Governor Bullock’s speech; Prime Terminal
