SYDNEY--Australian consumer prices rose strongly in August, affirming the Reserve Bank of Australia's decision on Tuesday to raise interest rates to a 15-year high.

The consumer price index for August rose 4.0% compared with the same period a year earlier, picking up from July's 3.5% increase, the Australian Bureau of Statistics said Wednesday.

Rising housing and transport costs drove most of the increase, the ABS said.

The data is likely to cement market expectations for another rise in interest rates by the RBA in November, with some economists speculating the central bank will continue to hike in 2027.

Housing was the largest contributor to annual inflation in August, rising by 5.7% over the year.

Transport was the second biggest contributor, rising 5.6% on year due to higher automotive fuel prices, the ABS said.

On a monthly basis, automotive fuel prices rose 14.8% in August, compared with a rise of 7.5% in July. The increase was driven by higher global oil prices and the unwinding of government tax relief to take some sting out of surging fuel costs.

Trimmed mean annual inflation remained steady at 3.6% for a third consecutive month in August, the ABS said.

"Even more concerning is the persistence of underlying inflation," said Stephen Smith, Partner at Deloitte Access Economics. "The result underscores the fact that inflation is a problem not just because of the conflict in the Middle East."