Australia inflation tops forecasts in July, adding to rate hike risk

Australian consumer prices rose more than expected in July, driven by a sharp jump in fuel and travel costs, according to data released on August 26, 2026. The hotter-than-forecast inflation figures, which also showed core inflation accelerating, have significantly increased the likelihood that the Reserve Bank of Australia will raise interest rates again. The monthly consumer price index from the Australian Bureau of Statistics increased by 1.0 percent in July from June, surpassing market expectations of a 0.8 percent rise. On an annual basis, inflation slowed to 3.5 percent from 3.8 percent, but this was still above forecasts for a sharper decline to 3.3 percent.