--- title: "Australia Rate Increases Stay in Play Despite Easing CPI — Update" type: "News" locale: "en" url: "https://longbridge.com/en/news/287710452.md" description: "Australia's consumer-price index rose 4.2% year-on-year in April, down from 4.6% in March, but remains above the Reserve Bank's target. The RBA raised the cash rate by 25 basis points for the third time this year, with expectations for further increases. Transport costs fell 2.7% monthly but were up 6.6% annually, contributing to inflation. Economists predict more tightening may occur, particularly at the August meeting, as global energy shocks impact the economy." datetime: "2026-05-27T03:28:44.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287710452.md) - [en](https://longbridge.com/en/news/287710452.md) - [zh-HK](https://longbridge.com/zh-HK/news/287710452.md) generator: "portal-rs" --- # Australia Rate Increases Stay in Play Despite Easing CPI — Update By Stuart Condie SYDNEY--Australia's consumer-price growth slowed in April following a temporary fuel tax cut, but stayed high enough to keep the door open to further rate increases by the central bank. The consumer-price index rose 4.2% over the 12 months through April, the Australian Bureau of Statistics said Wednesday. That was down from 4.6% for the year through March. Transport costs fell 2.7% from a month earlier after the federal government temporarily lowered the sales tax on gasoline and diesel to mitigate sharp price rises stemming from the Iran conflict. However, transport costs were still up 6.6% on the year, making them the second-biggest driver of annual inflation, which remains well above the Reserve Bank of Australia's 2.5% target. RBA officials will likely be concerned by a rise in trimmed mean annual inflation--which strips out some volatility--to 3.4% in April, from 3.3% in March. The central bank this month raised the country's cash rate by 25 basis points for the third time this year, driving up borrowing costs, including for mortgages. The RBA has signaled that it will wait to assess more data before deciding whether to raise rates further. The market expects at least one more 25-basis-point rise by the end of 2026, according to pricing data compiled by the market operator. The Australian dollar pared gains immediately following the release of the data, potentially signaling increased confidence among traders that the RBA will hold the cash rate at 4.35% when it meets in June. Economists said that further policy tightening by the RBA remained likely, potentially at the board meeting in August. "The data suggests the effects of the conflict-driven global energy shock are starting to flow through the Australian economy, adding to price pressures and increasing the risk of another rate hike later this year," said Stephen Smith, partner at Deloitte Access Economics. Housing, which has the biggest weighting in the CPI basket, was the largest contributor to annual inflation with a 6.3% rise. Annual inflation had been on the rise--climbing from 1.9% in June 2025 to 3.8% in January--even before the U.S. and Israel attacked Iran in late February, sending oil prices soaring and driving a surge in fuel costs in Australia and globally. Consumer prices rose by a monthly 0.4% in April, falling 0.1% on a seasonally adjusted basis. The average price for regular unleaded gasoline fell 10% in April, partially reversing March's 33% jump, the ABS added. Average diesel prices rose 14% in April despite the tax cut. Write to Stuart Condie at stuart.condie@wsj.com (END) Dow Jones Newswires May 26, 2026 23:21 ET (03:21 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. ### Related Stocks - [STW.AU](https://longbridge.com/en/quote/STW.AU.md) - [IOZ.AU](https://longbridge.com/en/quote/IOZ.AU.md) - [QOZ.AU](https://longbridge.com/en/quote/QOZ.AU.md) ## Related News & Research - [It's Squeezed Liquidity That's Holding Stocks Back](https://longbridge.com/en/news/297688163.md) - [Manufacturers are getting frustrated: 'The economy is annoying'](https://longbridge.com/en/news/297686341.md) - [KSL: Net profit grew 4% to PGK59.7m, with capital adequacy at 26.0% and a higher interim dividend](https://longbridge.com/en/news/297439560.md) - [CUTRIC Has Lost The Right To Be Treated As A Neutral Transit Authority](https://longbridge.com/en/news/297610508.md) - [Alkemya Metacore Secures $50M via Tokenised Equity to Scale Nickel Energy and Security Tech](https://longbridge.com/en/news/297666275.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**