What is inflation, and what is mine?
Prices in general keep rising, so the same money buys a bit less each year.
If your pay rises slower than prices, you go backwards even with a pay rise.
The rule
- Prices rose 4.3% in the 12 months to September 2026, up from 4.0% to August. Trimmed mean inflation, another measure the Bureau publishes, was 3.6%. The next figure, for October, is due on 25 November 2026.
- The Reserve Bank's target is 2 to 3%. On 3 November 2026 it said inflation is not expected to reach the top of that range until late 2027.
- The 12 month rise differs by kind of spending. To September 2026: transport 8.7%, housing 5.2%, health 3.7%, food 3.2%, communication 2.3%, clothing and footwear 0.4%. Within those, electricity rose 12.8%, rents 3.6% and automotive fuel 23.6%.
- The Wage Price Index rose 3.2% in the 12 months to the June quarter 2026. Set beside prices that is about 1% less buying power. The two figures end a quarter apart, so it is a rough sum, not an official number.
What people ask
Why is inflation so high in Australia?
The Bureau of Statistics says transport led the rise to September 2026, with automotive fuel up 23.6% on higher world oil prices, and electricity up 12.8% largely because Commonwealth electricity rebates ended. The Reserve Bank says higher fuel prices are being passed through to other goods and services.
How does inflation affect interest rates?
The Reserve Bank uses the cash rate to bring inflation back to its 2 to 3% target. On 3 November 2026 it raised the rate to 4.85%, saying a further tightening was warranted to support the return of inflation to target.
Why is my inflation different from the national figure?
The national figure is an average of what households spend on. Someone who drives a lot, or pays for electricity, spends more of their money on things that rose faster. The model above weights each rate by what you spend.
Is my pay keeping up with prices?
Compare your own pay rise with prices. Nationally, wages rose 3.2% in the year to June 2026 and prices rose 4.3% in the year to September, so pay bought about 1% less. Your own pay rise may be higher or lower.