New inflation data was the trigger for this week's rate rise, and it points to a longer period of high rates. This article explains what the figures show and how to plan your funding around them.
What the ABS reported
The Consumer Price Index rose 4.3% in the 12 months to September 2026, up from 4.0% in August, according to the Australian Bureau of Statistics (ABS).
Trimmed mean inflation, which smooths out temporary price shocks, was 3.6% over the year. In the September quarter, the trimmed mean rose 1.0% and the CPI rose 1.3%.
Source: ABS Consumer Price Index, September 2026, released 28 October 2026.
What's driving it
- Housing: the largest contributor to annual inflation, up 5.2%, reflecting rising costs for new dwellings and electricity. New dwelling prices rose 4.7% over the year as builders passed on higher materials and labour costs.
- Transport: up 8.7% over the year because of higher automotive fuel prices. Fuel rose 9.4% in September, after a 14.8% rise in August, driven by higher world oil prices.
The ABS noted that fuel is excluded from the trimmed mean, which is a key reason headline inflation is higher than the underlying measure. But underlying inflation is also well above the RBA's 2–3% target band.
Why this means higher rates for longer
The RBA raised the cash rate to 4.85% on 3 November. It now expects inflation to stay high through much of 2027 and not to fall below 3% until late 2027. See Rates hit 4.85%.
Rate changes take 12 to 18 months to flow fully through the economy. That means the effect of this year's rises is still working its way through, while borrowers are already feeling the cost.
How to plan your funding
1. Don't plan around early cuts
Forecasts for rate cuts are only forecasts. If your business or investment plan only works if rates fall in 2027, it needs more buffer.
2. Review fixed-rate and facility expiry dates
Debt that rolls over in the next 12 months will reprice at today's rates. Map out every expiry and start conversations early.
3. Protect cash flow
Higher costs, slower sales and stretched customers all squeeze working capital. See SME loan enquiries are up 14%.
4. Build in valuation buffers
Higher rates tend to pull property values down, which reduces the equity available to refinance. See Why your valuation came in low.
5. Have a backup plan
If a bank refinance doesn't come through in time, know what your alternatives are before the deadline, not after.
For brokers
- Review clients with loans expiring in the next 6 to 12 months and open the conversation now.
- Use current rates and serviceability buffers when presenting scenarios.
- Identify clients who may fall outside bank policy and discuss alternatives early.
The Funding Door view
Higher-for-longer is now the planning assumption. Borrowers who budget for current rates, keep a buffer and line up their refinance early can get through it with their options intact.
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Submit Your Scenario →Funding Door Pty Ltd (ACN 638 679 964) provides finance for business and investment purposes only. This lending is not regulated credit, and consumer protections under the National Credit Code do not apply. Funding Door does not provide loans for owner-occupied residential purposes. This article is general in nature, does not constitute financial, credit, tax or legal advice, and does not take into account your individual objectives, financial situation or needs. Please seek independent professional advice before acting. All lending is subject to credit assessment, valuation, due diligence and formal approval.