Australia’s inflation edged higher in August as the monthly Consumer Price Index indicator rose 3.0 per cent over the year, up from 2.8 per cent in July, according to the Australian Bureau of Statistics. Michelle Marquardt, ABS head of prices statistics, said: ‘The 3.0 per cent annual CPI inflation to August was up from 2.8 per cent to July, making this the highest annual inflation rate since July 2024.’
Housing, Food and non-alcoholic beverages, and Alcohol and tobacco were the biggest annual contributors, rising 4.5 per cent, 3.0 per cent and 6.0 per cent respectively, the ABS said.
Measures of underlying price pressures were mixed. The annual trimmed mean slowed to 2.6 per cent from 2.7 per cent in July — within the Reserve Bank’s 2–3 per cent target band — while CPI excluding volatile items and holiday travel quickened to 3.4 per cent from 3.2 per cent. ‘Annual trimmed mean inflation was 2.6 per cent to August 2025. This is down from 2.7 per cent to July 2025’, Ms Marquardt said.
Electricity loomed large in the housing component. Costs jumped 24.6 per cent over the year to August, largely reflecting the unwinding of hefty state rebates that depressed prices a year ago in Queensland, Western Australia and Tasmania. Ms Marquardt said, ‘The annual rise in electricity costs is primarily related to households in Queensland, Western Australia and Tasmania having higher out-of-pocket costs in August 2025 than they did in August 2024. In August last year, State Government electricity rebates were in place for Queensland ($1000), Western Australia ($400) and Tasmania ($250). Over the year, those rebates have been used up and those programs have finished. Excluding the impact of the various changes in Commonwealth and State electricity rebates over the last year electricity prices rose 5.9 per cent’.
On a monthly basis, electricity prices fell 6.3 per cent in August as households in New South Wales and the ACT received the first instalments of extended Commonwealth Energy Bill Relief Fund rebates, the ABS said. The bureau also revised July’s electricity movements, lifting the monthly rise to 13.5 per cent (from 13.0 per cent) and the annual increase to 13.6 per cent (from 13.1 per cent).
Rents rose 3.7 per cent over the year, easing from 3.9 per cent in July and marking the slowest annual pace since November 2022 amid broadly stable vacancy rates across most capitals. New dwelling prices were up 0.7 per cent, from 0.4 per cent in July, with the ABS noting annual growth remains subdued in a soft new home market.
Food and non-alcoholic beverage inflation held at 3.0 per cent, where it has hovered for the past year. Meat and seafood prices rose 2.9 per cent, up from 2.4 per cent in July, while fruit and vegetables increased 1.1 per cent, slowing sharply from 4.8 per cent. In monthly terms, vegetable prices fell 4.6 per cent, led by cheaper broccoli, tomatoes and cauliflower.
Holiday travel and accommodation increased 1.1 per cent annually, down from 3.3 per cent, and fell 3.5 per cent in the month as the July school holiday effect faded.
The headline rate now sits at the top of the central bank’s target range, while the divergence between underlying measures underscores a still‑uneven disinflation trend. Analysts will look to upcoming quarterly updates for a fuller read on price pressures, with the ABS noting some CPI components are updated less frequently than others. ABS figures are the source of all data.
