+34Australia's annual inflation rate rose to 4 per cent in August from 3.5 per cent in July, with Treasurer Jim Chalmers blaming higher fuel costs from the US-Israel war on Iran while economists warn another rate hike is likely.
Australia's annual inflation rate has climbed to 4 per cent in the 12 months to August, up from 3.5 per cent in July, according to the Australian Bureau of Statistics.
Inflation and Global Oil Pressures
The increase was slightly less than economists had anticipated, but underlying inflation remained steady at 3.6 per cent, well above the Reserve Bank's 2.5 per cent target. Treasurer Jim Chalmers blamed the jump on higher global oil prices linked to the ongoing US-Israel war on Iran. He said the overwhelming reason annual headline inflation rose in August compared to July was the impact of higher global oil prices flowing through to oil prices in Australia.
Fuel prices surged by 15 per cent last month, the ABS said, after the worsening Middle East conflict triggered a rebound in global oil prices and the government ended its cut to the fuel excise. Chalmers was accused of gaslighting Australians by insisting government spending was not responsible for high inflation. He denied being at odds with RBA governor Michele Bullock, who said inflation is too high and has been driven by domestic capacity pressures.
Bullock also pointed to the worsening Middle East conflict and a sudden boom in AI-related spending on datacentres, saying these developments suggest inflationary pressures will persist for longer than previously expected. The ABS said rising transport costs were the prime contributor to price increases in the month.
A 5.4 per cent increase in home building costs over the 12 months to August was one of the prime drivers of high annual inflation as builders passed on higher costs for materials and labour. Electricity bills were also higher than this time last year when households were still receiving government rebates. ABS head of price statistics Rachael McCririck said housing was the largest contributor to annual inflation in August, rising by 5.7 per cent.
RBA Rate Hike Outlook
In the month of August, the CPI rose 0.7 per cent in seasonally adjusted terms. Cherelle Murphy, EY's chief economist, said another rate hike looks likely by the end of the year. A day after the RBA lifted its cash rate to 4.6 per cent, the fourth increase in 2026, Murphy said this is not the end of it.
She said government spending at commonwealth and state levels was high and adding to demand, meaning the government should be extremely careful with any new spending, including additional cost of living relief. Prime Minister Anthony Albanese said the government plans to provide further cost-of-living relief in the mid-year economic and fiscal outlook. Murphy said it was impossible to quantify exactly how much government spending was responsible for persistently high inflation.
She said the biggest part of the problem is global supply shocks, and what we are witnessing is the accumulation of a number of events happening together, none of them good for inflation. Separately, Qatar says mediation efforts between the United States and Iran are continuing, with messages exchanged between the two sides. Qatari Foreign Ministry spokesman Majed al-Ansari said there is concern about a possible escalation in the conflict and Qatar is actively trying to prevent it.
Online Abuse and Technology
He said every day the war continues and instability persists in the region makes it more difficult for the international economy. Communications Minister Annika Wells announced a new round of grants targeting tech abuse online, designed to address violence against women and the impact of the manosphere. She said every Australian should feel safe using their phone, tablet or computer, but that is not the case for everybody, and overwhelmingly it is women and girls who are targeted online.
More than two-thirds of complaints to the e-Safety Commissioner about cyber-based abuse or image-based abuse are from women and girls, while boys and young men are being fed content pushing them towards the manosphere at lightning speed. The federal and Victorian governments have pledged to build a station at Keilor East in Melbourne's north west.
Early work on a seven kilometre rail line from Albion towards Melbourne Airport will begin in the coming weeks, but major construction won't begin for two years. Victorian Premier Ben Carroll said the project will bring public transport to people who have never had it, noting the area is less than 20 kilometres from the Melbourne GPO but has been car dependent for 100 years.
Melbourne Rail and Morocco Leadership
Many residents in the 1970s were promised a train station when they bought their properties, and we are now delivering it, he said. Melbourne is the only city in the top 20 OECD nations without an airport rail link. King Mohammed named Urban Planning Minister Fatima Zahra El Mansouri as Morocco's first female prime minister. El Mansouri's centrist Authenticity and Modernity Party was the highest vote-getter in recent elections and is now tasked with forming a new coalition government.
She is only the second woman to serve as prime minister in the Arab world after Najla Bouden in Tunisia. El Mansouri said this is a historic moment because for the first time in our country's history a woman has been appointed head of government, a source of pride for all the women of Morocco. The United Nations declared International Translation Day almost 10 years ago and says language professionals connect nations and foster peace, understanding and development.
Nepalese interpreter Bhimsen Sapkota said while AI is increasingly used for translation, it cannot always capture the meaning and emotion behind people's words, particularly in sensitive situations such as domestic violence support. Sapkota is celebrating his first International Translation Day with Multicultural NSW, joining more than 1,000 professionals helping people in more than 120 languages.
Australia Faces Brazil
In sport, goals by Alessandro Circati and Connor Metcalfe gave Australia the lead in the first half against Brazil, but the quality of Brazil showed as the game wore on. Australia led 2-1 at half time before the visitors scored three goals, including two late in the game, to take the win. The Socceroos went down to Brazil after a strong start.
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GuardianAus:Inflation leaps to 4% stoking fears of fifth interest rate hike before ChristmasThis story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
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