Australian Inflation Holds Steady at 3.8 Percent in Year to January
The Australian Bureau of Statistics said on February 25, 2026, that the country’s annual inflation rate held steady at 3.8 percent in the 12 months through January, unchanged from December and above the Reserve Bank of Australia’s 2-3 percent target band. Housing costs led gains with a 6.8 percent annual increase while food prices rose 3.1 percent and recreation and culture climbed 3.7 percent, according to the bureau. The data release followed a 25 basis point rate hike by the central bank three weeks earlier.
According to the Australian Bureau of Statistics release, the consumer price index advanced 0.4 percent in January itself, exceeding the median forecast of 0.3 percent. Michelle Marquardt, head of prices statistics at the bureau, said the 3.8 percent annual CPI inflation to January was unchanged from December. ABS figures also placed trimmed mean inflation at 3.4 percent for the year to January, up from 3.3 percent in December.
The Reserve Bank of Australia had raised its cash rate target by 25 basis points to 3.85 percent on February 4, its records show. A Reuters report on the inflation data noted that the core measure had reached a 16-month high, keeping it above target for a seventh straight month. Market participants at the time assigned an 80 percent probability of another rate increase at the bank’s next meeting.
Subsequent ABS releases showed annual inflation accelerating to 4.6 percent in the year to March before easing to 4.2 percent by April. The central bank lifted the cash rate by a further 25 basis points to 4.35 percent in its May 5 decision, according to its media release. The rate has since remained at that level through June 2026.
Analyses following the January release, including from Commonwealth Bank, highlighted that electricity and housing costs continued to weigh on households. The ABS has issued monthly CPI reports since transitioning from quarterly updates, supplying more frequent readings to policymakers and analysts. Commonwealth Bank noted that the bank’s preferred trimmed mean gauge had edged higher even as the headline figure held steady.
Later ABS data for the full first half of 2026 confirmed housing as a consistent driver across multiple prints, with the April CPI report placing annual housing inflation among the top contributors once again. The bureau’s April release detailed a 0.4 percent monthly increase that brought the annual rate to 4.2 percent. RBA board minutes from the period cited persistent price pressures in non-tradable sectors as a key consideration in rate settings.
