RBA's Inflation Target Under Threat as Fuel Prices Keep Rising

Australia's consumer price inflation rose to 4.0% in August, matching forecasts, as fuel prices surged and outweighed declines in clothing and travel costs.

The annual CPI rate increased from 3.5% in July, while the monthly rise of 0.4% was in line with some surveys but slightly below a Reuters consensus of 0.5%.

The trimmed mean measure, which strips out volatile price moves and is closely watched by the Reserve Bank of Australia, rose 0.2% in August, below the 0.3% forecast.

Fuel costs are a major concern for policymakers, as they remain well above the RBA's 2% to 3% target band, with both measures sitting at 4.0% and 3.6%, respectively.