Australia’s Melbourne Institute Monthly Inflation Gauge rose 0.3% month-on-month in September 2026, slowing from a 0.5% increase in the previous month and marking the softest reading since June. The moderation suggests that tighter monetary policy is helping curb price pressures, with the three cash rate increases since the start of the year tightening financial conditions as economic activity slows. However, inflation remains too high, with some upside risks materialising. Annual inflation accelerated to 4.0% in August from 3.5% in July, the highest in three months and still above the Reserve Bank of Australia’s 2–3% target range. Meanwhile, weak productivity growth continues to constrain potential output, while uncertainty over the economic impact of the housing market downturn adds to the outlook risks.