{"id":308902,"date":"2026-02-25T04:47:09","date_gmt":"2026-02-25T04:47:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/308902\/"},"modified":"2026-02-25T04:47:09","modified_gmt":"2026-02-25T04:47:09","slug":"inflation-in-january-slightly-hotter-than-expected-keeping-rba-rate-hike-on-table","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/308902\/","title":{"rendered":"Inflation in January slightly hotter than expected, keeping RBA rate hike on table"},"content":{"rendered":"

Inflation remained well above the Reserve Bank’s target band last month, keeping pressure on the central bank to potentially hike interest rates further.<\/p>\n

The headline Consumer Price Index (CPI) remained at 3.8 per cent in January, unchanged from December, in seasonally adjusted terms.<\/p>\n

But trimmed mean inflation, which is the RBA’s preferred measure of underlying inflation, rose to 3.4 per cent in January, up from 3.3 per cent in December.<\/p>\n

Inflation was slightly hotter than forecast.<\/p>\n

Economists had been expecting headline inflation to slip a little in January to 3.7 per cent and for trimmed mean inflation to hold steady.<\/p>\n

RBA governor grilled over rising inflation <\/a><\/p>\n

RBA governor Michele Bullock has refused to blame the Albanese government for rising inflation, as a political fight breaks out in the wake of the bank’s rate hike.<\/p>\n

The hotter-than-expected inflation data has been published three weeks after the Reserve Bank lifted interest rates by 0.25 percentage points<\/a> on concerns that inflation was rising too quickly in Australia.<\/p>\n

Three weeks ago, the RBA Board issued a statement<\/a> saying that inflation was likely to remain above target “for some time”.<\/p>\n

The RBA’s judgement that inflation might be higher for longer in Australia has prompted weeks of political arguments in Canberra about who is to blame.<\/p>\n

On Wednesday, the ABS said the largest contributor to annual inflation in January was housing, up 6.8 per cent.<\/p>\n

That was followed by food and non-alcoholic beverages, up 3.1 per cent, and recreation and culture which rose 3.7 per cent.<\/p>\n

End of energy rebates<\/p>\n

Treasurer Jim Chalmers said January’s inflation numbers were not unexpected.<\/p>\n

“We expected there to be upward pressure on today’s figures, in part because this is the first data to take into account the end of the Commonwealth’s energy rebates<\/a>,” he said.<\/p>\n

“Ending those energy rebates was a difficult decision, and we know the impact it is having on families and on this data.<\/p>\n

Government will not extend energy bill relief<\/a><\/p>\n

Jim Chalmers says the end to the “temporary” subsidy was a “hard” decision but recognises pressures on the budget.<\/p>\n

“We can expect these sorts of numbers to continue, particularly in the first half of this year.”<\/p>\n

He said the uptick in inflation in recent months was also reflecting the strong private sector recovery that occurred in the second half of last year.<\/p>\n

“These new numbers are another important reminder that the coming budget will have the right focus on inflation and productivity against a backdrop of global uncertainty,” he said.<\/p>\n

More rate hikes in coming months?<\/p>\n

Economists say the chance of more rate hikes this year is high.\u00a0<\/p>\n

Many have nominated May as the month when the next rate rise will occur.<\/p>\n

EY chief economist Cherelle Murphy said the Reserve Bank “has its work cut out” to get inflation back within the target band.<\/p>\n

“We remain of the view that the central bank will need to raise the cash rate further, most likely in the first half of this year with further rate hikes possible given persistent inflation pressures,” she said.<\/p>\n

\"A<\/p>\n

Cherelle Murphy says the RBA “has its work cut out” to bring inflation back down. (ABC News)<\/p>\n

Callam Pickering, the Asia-Pacific economist at Indeed, said another rate hike was “almost certain.”<\/p>\n

“May [is] the most likely scenario, and we believe a second rate hike will be delivered in August,” he said.<\/p>\n

RBA deputy governor defends central bank from critics<\/a><\/p>\n

RBA deputy governor Andrew Hauser says central banks should not criticise normal government spending choices.<\/p>\n

“If that eventuates then the RBA will be more aggressive than financial markets currently expect, but we feel that will be necessary to curtail demand and bring inflation back to target sooner than the end of next year.<\/p>\n

“While rate hikes are almost universally disliked, the reality is that high inflation is more damaging, impacting everyone, particularly lower-income earners who are poorly positioned to absorb the hit of rising prices.”<\/p>\n

BetaShares chief economist David Bassanese said monthly inflation data always had to be interpreted with caution, but the broad-based nature of the price increases in January suggested that demand was too strong and the RBA would not like it.<\/p>\n

“One caveat to today’s results is the impact of electricity subsidy roll-offs,” he said.<\/p>\n

“Although the unwinding of electricity subsidies has contributed to headline inflationary pressure, it is also possibly contributing to upward pressure on measured underlying inflation by skewing the overall distribution in prices upward.”<\/p>\n","protected":false},"excerpt":{"rendered":"Inflation remained well above the Reserve Bank’s target band last month, keeping pressure on the central bank to…\n","protected":false},"author":2,"featured_media":308903,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[21017,114,9575,184,155048,85,932,46,46174,21015,2958],"class_list":{"0":"post-308902","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-australian-bureau-of-statistics","9":"tag-business","10":"tag-economic-growth","11":"tag-economy","12":"tag-energy-rebates","13":"tag-il","14":"tag-inflation","15":"tag-israel","16":"tag-jim-chalmers","17":"tag-reserve-bank-of-australia","18":"tag-unemployment"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/308902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=308902"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/308902\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/308903"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=308902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=308902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=308902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}