Australian inflation remained stubborn in the opening month of 2026, with the consumer price index rising 3.8% in the 12 months to January.
According to the latest Australian Bureau of Statistics data, the annual figure remains unchanged from December, though underlying pressures suggest a complex economic landscape.
Michelle Marquardt, ABS head of prices statistics, noted that while the headline rate held firm, the trimmed mean—a key measure of underlying inflation—edged up to 3.4%, signaling persistent price growth across the economy.
Housing emerged as the primary driver of inflationary pressure, soaring 6.8% annually.
The spike was heavily influenced by a dramatic 32.2% jump in electricity costs, largely attributed to the cessation of the Commonwealth Energy Bill Relief Fund and various state rebates.
Without the subsidies, the underlying increase in electricity prices sat at a more modest 4.5%, reflecting retailer reviews from mid-2025.
Food and non-alcoholic beverages saw a slight deceleration to 3.1%, though "meals out and takeaway" remain expensive due to rising wages.
Recreation and culture eased to 3.7% as the frantic pace of domestic holiday travel prices began to cool, dropping from a nearly 10% high in December 2025 to 5.6% in January.