What the latest CPI showed

The ABS released its September 2026 CPI on 28 October. The All groups CPI rose 0.8 per cent in the month in original terms, and 0.6 per cent seasonally adjusted. Over the 12 months to September 2026 it rose 4.3 per cent, up from 4.0 per cent in the year to August.

The rise was concentrated in a few places. Here are the annual changes to September 2026:

• Transport rose 8.7 per cent. Automotive fuel rose 23.6 per cent over the year and 9.4 per cent in September alone. The ABS attributed this to higher world oil prices.
• Housing rose 5.2 per cent, the largest contributor. Electricity rose 12.8 per cent, which the ABS largely attributed to Commonwealth electricity rebates ending. New dwellings rose 4.7 per cent and rents 3.6 per cent.
• Food and non-alcoholic beverages rose 3.2 per cent, led by meals out and takeaway.
• Tobacco inflation eased to 8.3 per cent from 11.5 per cent, after the end of extra 5 per cent September excise rises applied in the previous three years.

The underlying measures were lower but still high. Annual trimmed mean inflation was 3.6 per cent, up from a revised 3.5 per cent in August, and the weighted median was 3.4 per cent.

On 3 November the RBA’s Monetary Policy Board raised the cash rate target by 25 basis points to 4.85 per cent, on a 6–3 vote. Its statement said “recent data indicate that it is broadly based”. VNN covers that decision in a separate article.

How Australia’s monthly CPI works

From quarterly, to partial monthly, to complete monthly

For most of its history, Australia’s official CPI was published only once a quarter. The ABS later added a Monthly CPI Indicator, whose published data covered September 2022 to September 2025. It had a big gap: only about 50 per cent of the basket, by weight, was priced every month, with 41 per cent priced quarterly and 9 per cent annually. So a month’s result partly depended on which prices happened to be refreshed.

From April 2024 the ABS began collecting many more prices every month, to build a full monthly series. The Monthly CPI Indicator ended with its release on 29 October 2025. The first complete Monthly CPI, for October 2025, came out on 26 November 2025. At that point it became what the ABS called the “primary measure of headline inflation” for Australia.

Now about 87 per cent of the basket’s weight is priced monthly, 4 per cent quarterly and 9 per cent annually, the last covering items such as school fees and private health insurance. The ABS also draws on large datasets such as supermarket scanner data and a new childcare dataset.

What happened to the quarterly CPI?

It still exists, but it is now built from the monthly figures. The quarterly CPI is the average of the three monthly CPIs in each quarter, and it appears in every third monthly publication: the March, June, September and December releases. The ABS found the new method closely matches the old quarterly CPI.

The quarterly series still matters to the Reserve Bank. The RBA says monthly headline CPI is now “the new target for monetary policy”, but for underlying inflation it will initially stay focused on the well-understood quarterly trimmed mean, possibly moving to monthly measures over time.

What’s in the basket, and how it is weighted

The CPI tracks prices paid by households in Australia’s eight capital cities. It covers 87 “expenditure classes”, grouped into 11 groups. Each class carries a weight equal to its share of total household spending. Those weights describe spending by households overall. They do not describe an “average household”.

The most recent published weights come from the 2025 annual update, released on 26 February 2025. That update was based mainly on Household Final Consumption Expenditure data for 2023–24. The group weights are:

Group	Weight (%)
Housing	21.39
Food and non-alcoholic beverages	17.44
Recreation and culture	12.74
Transport	11.45
Furnishings, household equipment and services	8.02
Health	6.73
Alcohol and tobacco	6.58
Insurance and financial services	5.58
Education	4.69
Clothing and footwear	3.25
Communication	2.13

Source: ABS, Annual weight update of the CPI and Living Cost Indexes, 2025.

The largest single classes are new dwelling purchase (7.59 per cent), rents (6.61 per cent), medical and hospital services (5.03 per cent) and restaurant meals (3.95 per cent). Mortgage interest payments are not in the CPI, so a rate rise does not directly lift it.

The ABS has reweighted the CPI annually since 2018, which limits the bias that builds when people switch away from items that have become dearer. It postponed the 2026 update because of the move to the complete Monthly CPI, and later decided no mid-year update was needed. The weights will next be updated for January 2027, in a release due 24 February 2027. So the 2026 figures use 2023–24 spending patterns, and this year’s jumps in fuel and power bills will not shift the weights until early 2027.

Headline versus underlying inflation

Headline CPI is the full basket, every price change included. It is what households experience, and it is the measure the RBA’s target is set on.

Headline figures can jump on one-off events such as a fuel spike, a rebate ending or a tax change, as electricity and tobacco showed in September. So economists also look at underlying measures, which the ABS says “provide an indication of the medium-term trajectory of inflation”.

• Trimmed mean: the ABS ranks all 87 expenditure classes by their seasonally adjusted price change. It removes the 15 per cent of the basket (by weight) with the largest falls and the 15 per cent with the largest rises, then averages the middle 70 per cent.
• Weighted median: using the same ranking, this is the price change of the class at, or just above, the halfway point of the basket by weight.

Neither measure excludes a fixed list of items: whatever moved most in a given period gets trimmed, so a fuel surge is likely to be cut one month and counted the next if it flattens. When headline inflation runs well above the trimmed mean, as it did in September (4.3 per cent against 3.6 per cent), a few big movers are lifting the total. The trimmed mean also rose, which shows the pressure was not confined to fuel.

Why the RBA watches it so closely

The RBA’s goal is to keep consumer price inflation between 2 and 3 per cent, and it has said policy aims to return inflation to the midpoint of that band. Cash rate changes flow through lending rates, spending and the exchange rate to inflation, but with long lags, so the RBA sets policy on where inflation is heading rather than on one month’s number.

In its November statement the RBA forecast inflation to stay above 3 per cent over the coming year and not reach the top of the band until late 2027, and flagged a rising risk of entrenched inflation expectations. Each monthly CPI tests that forecast, though the RBA has cautioned the series “may be volatile on a month-to-month basis”.

How to read the next CPI release

The October 2026 CPI is due on Wednesday 25 November 2026 at 11:30am AEDT (8:30am in Perth). Here is a practical checklist.

1. Start with the annual headline rate, then check the month

The 12-month figure (4.3 per cent in September) is what most coverage leads with. Then check whether the monthly change is quoted in original terms or seasonally adjusted, which removes regular calendar patterns. In September it was 0.8 per cent original and 0.6 per cent seasonally adjusted.

2. Go straight to the trimmed mean

If headline rises but the trimmed mean holds steady, the move is probably concentrated in a few items. If both rise, the pressure is broader. Monthly underlying figures are still new: the ABS revised August’s trimmed mean down from 3.6 to 3.5 per cent after updating seasonal factors.

3. Find the main contributors

The ABS lists the biggest contributors. In October, watch whether fuel keeps climbing or reverses, and whether electricity settles after the end of rebates.

4. Remember what is not a quarter

October is not a quarter-end month, so the 25 November release will not include new quarterly figures. Quarterly data arrives with the December 2026 CPI, due on 27 January 2027.

5. Watch for revisions and calendar changes

Seasonally adjusted figures can be revised as seasonal factors are re-estimated, and standard seasonal adjustment will not cover every item until mid-2027. From February 2027 the CPI moves to the fourth Wednesday of each month.

What happens next

• 25 November 2026: October 2026 CPI released.
• 6 January 2027: November 2026 CPI released.
• 27 January 2027: December 2026 CPI released, including December quarter figures.
• 24 February 2027: January 2027 CPI, the first with updated weights.
• Mid-2027: the ABS expects standard seasonal adjustment to cover all items.

The RBA’s Monetary Policy Board next meets on 7–8 December 2026, which means the October CPI on 25 November will be in hand when it decides.