Headline inflation jumps to 4% as RBA holds rate at 15-year high
Australia's headline inflation jumped to 4% in August, while core inflation held steady at 3.6%, well above target.
Headline inflation in the year to August climbed to 4 per cent from 3.5 per cent, pushing the RBA to hold rates at a 15-year high this week. Core inflation, which strips out volatile items like food and fuel, stayed at 3.6 per cent, still well above the RBA's 2-3 per cent target band.
The data includes pressure from Middle East conflict driving up global energy prices, but also demand from artificial intelligence and ongoing domestic capacity constraints. Cabinet Secretary Andrew Charlton defended Treasurer Jim Chalmers on Sunday, saying he is managing the economy "extraordinarily" amid global challenges and has delivered cost of living relief to Australians without tipping into recession.
Chalmers had blamed fuel costs, but the RBA and economists point to public spending, which accounts for about 27 per cent of GDP, as a key factor.
- 4 per cent
- Headline inflation
- 3.6 per cent
- Core inflation
- 2-3 per cent
- RBA target band
- 27 per cent of GDP
- Public spending share
Why it mattersHigher inflation means mortgage rates stay elevated, putting pressure on Australian households and weakening Labor's economic management message ahead of the next election.
AustraliaAustralian mortgage holders face continued pressure as interest rates remain at 15-year highs, and the government's economic credentials come under scrutiny.
Corroborated bythenightly.com.au
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