{"id":910847,"date":"2026-09-30T09:42:12","date_gmt":"2026-09-30T09:42:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/910847\/"},"modified":"2026-09-30T09:42:12","modified_gmt":"2026-09-30T09:42:12","slug":"inflation-leaps-to-4-stoking-fears-of-fifth-interest-rate-hike-before-christmas-australia-news","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/910847\/","title":{"rendered":"Inflation leaps to 4% stoking fears of fifth interest rate hike before Christmas | Australia news"},"content":{"rendered":"

Inflation has jumped to 4% in the year to August, from 3.5%, as Jim Chalmers was again forced to defend Labor\u2019s economic management amid fears the Reserve Bank will need to hike interest rates<\/a> again before Christmas.<\/p>\n

The increasingly embattled treasurer was asked if he was \u201cgaslighting\u201d Australians by insisting that government spending was not responsible for high inflation, blaming instead higher fuel costs associated with the ongoing US-Israel war on Iran.<\/p>\n

\u201cWe can see in today\u2019s inflation figures that the overwhelming reason why annual headline inflation has come up in August compared to July is because of the impact of higher global oil prices flowing through to oil prices in Australia,\u201d Chalmers told reporters in Sydney.<\/p>\n

\u201cThat\u2019s not an opinion. It\u2019s a fact.\u201d<\/p>\n

Fuel prices surged by 15% last month, the Australian Bureau of Statistics said, after a worsening Middle East conflict triggered a rebound in global oil prices and the government ended its cut to the fuel excise.<\/p>\n

Rising transport costs were the prime contributor to price increases in the month, the ABS confirmed.<\/p>\n

But a 5.4% increase in home building costs over the 12 months to August was one of the prime drivers of high annual inflation \u201cas builders passed on higher costs for materials and labour\u201d, the ABS said.<\/p>\n

Electricity bills were also higher than this time last year when households were still receiving government rebates.<\/p>\n

The rise in headline inflation was slightly less than economists had anticipated, while underlying inflation \u2013 which removes the most volatile prices swing \u2013 was steady at 3.6% in the year to August.<\/p>\n

Both were still well above the RBA\u2019s 2.5% target. Cherelle Murphy, EY\u2019s chief economist, said \u201canother rate hike looks likely by the end of the year\u201d.<\/p>\n

A day after the RBA lifted its cash rate to 4.6% \u2013 the fourth increase in 2026 \u2013 Murphy said \u201cthey [the RBA] have an ongoing fight<\/a> on their hands\u201d.<\/p>\n

\u201cThis is not the end of it.\u201d<\/p>\n

Chalmers on Wednesday afternoon denied that he was at odds with Michele Bullock, the central bank governor, who at her press conference the previous day said \u201cinflation is too high and has been driven by domestic capacity pressures\u201d.<\/p>\n

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But Bullock also pointed to the worsening Middle East conflict and the sudden boom in AI-related spending on datacentres.<\/p>\n

\u201cThese developments suggest that inflationary pressures will persist for longer than previously expected,\u201d she said.<\/p>\n

Murphy said it was a fact that spending by governments, at the commonwealth and state levels, was high, and that this was adding to demand in the economy.<\/p>\n

She said this meant the government should be extremely careful with any new spending \u2013 including additional cost of living relief \u2013 for fear of making the RBA\u2019s job harder.<\/p>\n

But she said it was impossible to quantify exactly to what extent government spending was responsible for persistently high inflation in 2026.<\/p>\n

\u201cDo I think this is the biggest part of the inflation problem right now? No, the biggest part of the problem is that we have these global supply shocks.<\/p>\n

\u201cWhat we are witnessing is the accumulation of a number of events happening together, and none of them are good for inflation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Inflation has jumped to 4% in the year to August, from 3.5%, as Jim Chalmers was again forced…\n","protected":false},"author":2,"featured_media":910848,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-910847","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/910847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=910847"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/910847\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/910848"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=910847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=910847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=910847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}