Australia Q3 CPI unexpectedly surges to 3.2%, monthly CPI hits 14-month high

[Inflation Concept]
XtockImages

AUSTRALIA'S ANNUAL INFLATION RATE accelerated to 3.2% in Q3 2025, a notable increase from the 2.1% recorded in the second quarter. This reading was the highest since Q2, 2024 and came in hotter than market expectations of 3.0%.

The inflationary pressure was broad-based, hitting both the goods and services sectors: GOODS INFLATION saw a major surge, climbing to 3.0% from a previous 1.1% in Q2, marking a five-quarter peak. SERVICES INFLATION also accelerated, rising to 3.5% from a three-year low of 3.3% in the prior quarter, driven by price increases across various service industries.

The RBA’s preferred measure of underlying inflation, the TRIMMED MEAN, jumped to 3.0% year-over-year, surpassing the consensus forecast of 2.7%, marking the highest reported since the fourth quarter of 2024, signaling persistent and entrenched price pressures across the economy.

The MONTHLY CONSUMER PRICE INDEX (CPI) rose 3.5% year-over-year in September 2025, up from 3.0% in August and exceeding expectations for a 3.1% rise, marking the highest monthly reading since July 2024 and keeps inflation firmly above the RBA’s target range of 2–3%.

FOOD INFLATION also picked up pace, accelerating to a three-month high of 3.1%.

Meanwhile, the ANNUAL TRIMMED MEAN INFLATION rose to 2.8% in September, the highest in five months, up from 2.6% in August.

CORE INFLATION—which excludes volatile items and travel—also increased, rising to 3.7% from 3.4%, marking its highest level in 14 months.

The S&P/ASX 200 Index [https://seekingalpha.com/symbol/AS51#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] fell 0.95% dropped 0.8% to around 8,940 on Wednesday, hitting a two-week low, as faster-than-expected inflation data strengthened bets that the Reserve Bank of Australia will keep rates on hold for longer. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] strengthened to around $0.660 on Wednesday, hitting its highest level in three weeks.

ETFs: (NYSEARCA:EWA [https://seekingalpha.com/symbol/EWA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]), (NYSEARCA:FXA [https://seekingalpha.com/symbol/FXA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]), (NYSEARCA:FLAU [https://seekingalpha.com/symbol/FLAU#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]).

MORE ON AUSTRALIA

*
Australia's Q2 producer price index rises 0.7%, following soft consumer inflation report [https://seekingalpha.com/news/4476250-australias-q2-producer-price-index-rises-07-following-soft-consumer-inflation-report#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

* Australia CPI slowest in four years in Q2, headline CPI at 0.7% Q/Q and 2.1% Y/Y [https://seekingalpha.com/news/4473998-australia-cpi-slowest-in-four-years-in-q2-headline-cpi-at-07-qq-and-21-yy#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]
*
Australia's trade surplus narrows to five-year low in May, missing forecasts amid export dip [https://seekingalpha.com/news/4465144-australias-trade-surplus-narrows-to-five-year-low-in-may-missing-forecasts-amid-export-dip]

*
Australia's Q1 GDP misses estimates amid weak public spending, consumer demand, and exports [https://seekingalpha.com/news/4455229-australias-q1-gdp-misses-estimates-amid-weak-public-spending-consumer-demand-and-exports]

* RBA Minutes: Rate cut signals caution, data to drive future policy [https://seekingalpha.com/news/4454669-rba-minutes-rate-cut-signals-caution-data-to-drive-future-policy]