Australia’s consumer inflation expectations rose to 5.9% in April 2026 from 5.2% in March, marking the highest level since November 2022 and highlighting growing concern over persistent price pressures. The uptick followed the Reserve Bank’s decision to raise the cash rate by 25 basis points to 3.85% in March, after a similar move in February, as inflationary forces re-emerged from mid-2025. Higher oil prices, driven by heightened tensions in the Middle East, have been a key near-term catalyst, feeding into elevated short-term inflation expectations.
Deputy Governor Andrew Hauser recently cautioned that the economy is facing a difficult macroeconomic environment, where stubbornly high inflation and limited supply capacity are amplifying the risk of stagflation should energy shocks persist. He emphasized that inflation remains above target, with annual CPI running at 3.7% in February, still outside the central bank’s 2–3% target band. Current forecasts suggest inflation is unlikely to return to target before mid-2027, underscoring the protracted and uncertain path back to price stability.
