FX.co ★ Australia Inflation Gauge Hits 3-Month Low

Australia’s Melbourne Institute Monthly Inflation Gauge rose 0.3% month-on-month in September 2026, easing from a 0.5% increase in August and marking the weakest pace since June. This moderation indicates that tighter monetary policy is starting to restrain price pressures, with the three cash rate hikes since the beginning of the year tightening financial conditions as economic activity cools. Even so, inflation remains elevated, and some upside risks have begun to materialise. Annual inflation accelerated to 4.0% in August from 3.5% in July, the highest level in three months and still above the Reserve Bank of Australia’s 2–3% target range. At the same time, persistently weak productivity growth is limiting potential output, while uncertainty surrounding the economic impact of the housing market downturn is adding to the risks to the outlook.