Australia’s Inflation Gauge Hits 2-Year High

2026-01-19 00:24 By Farida Husna 1 min. read

Australia’s Monthly Inflation Gauge, compiled by the Melbourne Institute, surged 1.0% mom in December 2025, marking the fastest pace since December 2023 and a sharp pickup from 0.3% in the prior two months.

The latest result came as the Reserve Bank held the cash rate steady at 3.6% for a third consecutive meeting in the month.

Policymakers noted inflation has cooled markedly from its 2022 peak but flagged renewed momentum in recent data.

Headline CPI eased to 3.4% yoy in November, the lowest since August, yet still above the central bank’s 2–3% target.

Trimmed mean CPI also edged down to 3.2% from October’s eight-month high of 3.3%.

The board assessed that inflation risks have modestly tilted upward, while downside pressures, particularly from global conditions, have eased.

Board members anticipate just one more rate cut this year, with underlying inflation expected to exceed 3% in the near term before easing to around 2.6% by 2027.



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