Australia’s consumer inflation expectations rose to 5.2% in March 2026 from 5.0% in February, reaching their highest level since July 2023, just ahead of the Reserve Bank of Australia’s policy meeting on March 17. The uptick followed the RBA’s 25 bp rate increase in February, which lifted the cash rate to 3.85%.
Policymakers noted that price pressures intensified in the second half of 2025 and remain uncomfortably high. While they expect some of the recent spike in inflation to unwind over time, they cautioned that a significant portion reflects underlying, persistent pressures that may require additional policy tightening. The board also highlighted that price rises have been broadly based across CPI components.
Against this backdrop, the RBA signaled that inflation is likely to remain above its 2–3% target band for an extended period, with both headline and core inflation still elevated. Current forecasts indicate that inflation may not return to the target range until around mid-2027.
