Australia’s annual inflation edged down to 3.7% in February 2026, compared with market forecasts of 3.8%, which were also in line with the prior two months. However, the latest result remained outside the central bank’s 2–3% target. Goods inflation slowed (3.5% vs 3.8% in January), amid a decline in transport cost, with automotive fuel falling at a steeper rate before the Middle East conflict. (-7.2% vs -2.7%). Also, price growth eased for alcohol and tobacco (4.3% vs 5.0%), clothing (4.9% vs 5.3%), furnishings (1.3% vs 1.4%), communication (0.8% vs 1.4%), and education (4.8% vs 5.4%). In contrast, inflation held steady for food and non-alcoholic drinks (at 3.1%) and financial services (at 2.4%) while accelerating for housing (7.3% vs 6.8%) and recreation (4.0% vs 3.6%). Services inflation stood at 3.9%, unchanged from January. The trimmed mean CPI inched lower to 3.3% yoy, below both the prior figure and consensus of 3.4%. Monthly, the CPI was flat, reversing a 0.4% gain in January.
