The Melbourne Institute’s Monthly Inflation Gauge for Australia rose 0.5% month-on-month in August 2026, down from a 1.0% increase in July and marking a second consecutive monthly gain. The slower pace indicates that price pressures are easing from their March peak, although underlying inflation remains elevated.
Minutes from the Reserve Bank of Australia’s August meeting noted that underlying price growth had moderated slightly from late 2025 levels, but inflation was still considered “too high.” Policymakers also underscored upside risks stemming from the conflict in the Middle East, the global AI-driven expansion, and persistently weak productivity growth.
On an annual basis, inflation slowed to 3.5% in July from 3.8% in June, the lowest rate in eight months but still above the RBA’s 2–3% target band. The central bank expects inflation to return to target only gradually, by late 2027, reinforcing a cautious stance on the future path of monetary policy.
