Australia's Inflation Holds Firm at 3.8 Percent in January
The Australian Bureau of Statistics reported that the consumer price index (CPI) climbed 3.8 percent in the 12 months to January — unchanged from the rate recorded to December 2025 and up from 3.4 percent in November.
Underlying inflation, however, ticked slightly higher. The annual trimmed mean — the Reserve Bank of Australia's preferred gauge of core price pressures — edged up from 3.3 percent in December to 3.4 percent in January.
Housing remained the dominant force behind headline inflation, surging 6.8 percent year-on-year in January, a notable acceleration from the 5.5 percent recorded through December. Food and non-alcoholic beverages, along with recreation and culture, also featured among the key contributors to overall price growth.
The figures caught economists off guard. The Australian Associated Press reported Wednesday morning that analysts had widely anticipated CPI growth to ease to 3.6 percent in January, with the trimmed mean expected to hold steady at 3.3 percent — both projections ultimately missed.
Looking ahead, the Reserve Bank of Australia, in its latest forecasts issued earlier this month, projected that annual CPI growth would climb further to 4.2 percent by June before gradually retreating back within its 2-to-3 percent target band by June 2027.
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