Australia’s consumer price index (CPI) has slowed to 3.4 per cent year-on-year in November, according to the Australian Bureau of Statistics. This is a decrease from the previous month’s figure of 3.8 per cent, which had exceeded market expectations. Market consensus anticipated a 3.6 per cent increase for the 12 months to November. On a monthly basis, inflation remained flat.
The trimmed mean measure, preferred by the Reserve Bank of Australia (RBA), also indicated a slowdown, falling from 3.3 per cent to 3.2 per cent. This marks the second complete monthly CPI release since the ABS updated its inflation indicator methodology. The previous report’s higher-than-expected figures had led markets to consider potential interest rate hikes in 2026.
Towards the end of 2025, RBA Governor Michele Bullock indicated the possibility of increased borrowing costs in 2026 if inflation persisted. This statement followed the central bank’s decision to maintain the cash rate at 3.6 per cent. Prior to the release of Wednesday’s data, bond traders had priced in a 37 per cent probability of an interest rate increase in February, with a full pricing for a rate hike by May.
Looking ahead, the labour market report is scheduled for release on January 22, followed by the quarterly inflation numbers on January 28. The RBA is set to convene in early February to assess the economic landscape.
