‘Another blow’: CPI rises for fourth time this year

The Australian Bureau of Statistics (ABS) has revealed an elevated Consumer Price Index rate for September, which makes it more likely that the Reserve Bank will increase interest rates next week – something which one expert warns will almost certainly impact jobs.

After August saw the year-on-year CPI return to 4 per cent, the ABS has today (28 October) revealed a September rate of 4.3 per cent, placing the figure further beyond the Reserve Bank of Australia’s target band of 2 to 3 per cent.

Over September, the CPI rose 0.8 per cent in original terms and 0.6 per cent in seasonally adjusted terms.

While the figure is lower than the 2026 high of 4.6 per cent in March, this year’s significant fluctuation has resulted in extreme financial volatility, driven primarily by the global oil supply shock and a stubbornly high cost of living.

ABS head of price statistics Rachael McCririck noted that housing remained the largest contributor to annual inflation, rising by 5.2 per cent.

“Annual inflation of 5.2 per cent for housing reflected rising costs for both new dwellings and electricity. New dwelling prices rose 4.7 per cent in the 12 months to September as builders passed on higher costs for materials and labour. This is down from 5.4 per cent in the 12 months to August,” she said.

Transport was the second-largest contributor to inflation, with automotive fuel prices rising by 9.4 per cent in September.

The ABS noted that automotive fuel was excluded from the trimmed mean as it was a key factor in the difference between the former and headline inflation.

“Trimmed mean annual inflation was 3.6 per cent in September. Trimmed mean annual inflation in August was 3.6 per cent, but a change in seasonal factors has seen that revised down to 3.5 per cent,” McCririck said.

The increase in CPI is likely to impact the upcoming seventh RBA monetary policy decision in 2026.

The big four banks were split on what today’s decision would mean for the November rate change, with ANZ and Westpac forecasting a fifth hike to 4.85 per cent, and CBA and NAB hinting at a pause.

Employment Hero APAC managing director James Keene said the latest figures “are another blow for small-business owners, who now face the real prospect of a fifth rate rise next week”.

Keene reinforced that the inflation is reflected in small businesses’ balance sheets, with every rate rise leading to a higher change of overdraft or a business loan to pay wages, which is also likely to impact prices and clientele.

“Government needs to recognise that small businesses are the shock absorber for the economy. That means cutting compliance costs and red tape now. Business leaders are already relying more heavily on technology and AI to lift day-to-day productivity, and backing that investment helps owners avoid choosing between overextended on overheads or cutting staff,” he said.

“My message to the RBA is simple: small businesses can’t absorb another hike without it showing up in jobs.”

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