Media Release | Monthly Consumer Price Index Statement

25 Mar

min read

National Head of Corporate Marketing & Communications

Mitchy Koper

Media Release | Monthly Consumer Price Index Statement

25 Mar 2026

min read

Following today's release of the monthly Consumer Price Index (CPI) by the ABS, the following statement can be attributed to Oliver Hume Chief Economist, Matt Bell.

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Today’s February CPI results were a touch weaker than the market expected, but in line with the RBA’s forecasts. Underlying inflation was steady at 3.3% and headline inflation moved down from 3.8% to 3.7%.

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But it’s not today’s result that is of concern for the RBA or consumers, it’s the coming spike in March and beyond. The driver of inflation and rates has clearly shifted from the domestic to the global. Treasury is expected to forecast inflation to rise into the high 4’s as the Middle East crisis increases fuel prices, which are likely to flow into prices more broadly.

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Prior to today’s result, the market had another rate hike by July, and a second by October, but the outlook is murky for rates with the potential for a change in both directions, more hikes or even a move back to holds or cuts.

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The RBA will have to balance the deteriorating inflation outlook, even if it is only short term, with impacts of increased global uncertainty on economic activity and wealth. The easing of the unemployment rate to 4.3% in February would have been welcomed by the RBA looking to take some heat out of the economy.

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Early signs from weekly measures of consumer sentiment show consumers are at all time lows, below even pandemic levels.

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In property, we are already seeing costs rise. Transport costs for materials and labour suppliers have risen and are being built into upcoming price increases which will end up being borne largely by consumers.

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Housing inflation is already the largest contributor to inflation and is running at 7.2%, up from 5.2% in November last year. The main contributors to the annual rise were Electricity (+37.0%), New dwellings (+3.7%) and Rents (+3.8%).

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The outlook for property for the remainder of 2026 has become as uncertain as the outlook for the Middle East crisis and rates. Fundamentals remain in place for ongoing strong demand, but plunging consumer sentiment and a potential return to excessive construction cost growth are serious risks.

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