The Australian Bureau of Statistics released the July Consumer Price Index this morning, and the headline number moved in the right direction. The CPI rose 3.5 per cent in the 12 months to July 2026, down from 3.8 per cent in the 12 months to June. The detail is less comfortable. Prices rose 1.0 per cent in the month of July alone, and underlying inflation did not budge.

The numbers that matter

  • Headline CPI: 3.5 per cent over the year to July, down from 3.8 per cent.
  • Trimmed mean: 3.6 per cent, unchanged from June. This is the underlying measure that strips out the biggest price swings.
  • Housing: up 5.0 per cent over the year and the largest contributor. The ABS says new dwelling prices rose 5.7 per cent.
  • Food and non-alcoholic beverages: up 3.2 per cent, with meals out and takeaway up 4.5 per cent.
  • Automotive fuel: up 7.5 per cent in July alone. The ABS put this down to higher world oil prices and the partial unwinding of the federal government's fuel excise relief.

Why business owners should care

A trimmed mean stuck at 3.6 per cent is still above the Reserve Bank's 2 to 3 per cent target band. That matters for anyone with a business loan, an overdraft or equipment finance, because it gives the RBA little reason to feel relaxed about interest rates. We will not guess what the Board does next, but it would be unwise to build a budget that depends on cheaper money arriving soon.

The fuel figure is the one most likely to show up in your own accounts first. If you run vehicles, make deliveries or rely on freight, a jump like that flows through quickly.

What to do now

  • Review your pricing. If your costs have risen and your prices have not moved in 12 months, your margin has shrunk. Small, regular price reviews are easier on customers than one large catch up.
  • Check fuel and freight clauses. If you quote jobs weeks ahead, consider whether your quotes allow for cost movements.
  • Stress test your repayments. Work out what your loan repayments look like if rates stay where they are for another year, or rise.
  • Look at leases and contracts with CPI clauses. Rent reviews tied to CPI will reflect these figures, so check which index and which period your lease uses.
  • Keep fuel records. If your business is eligible for fuel tax credits, good records make sure you claim what you are entitled to.

This article is general information only and is not financial advice. If rising costs are squeezing your cash flow, speak with your accountant early.