Australia’s inflation rate was steady at 3.8 percent in the year to January 2026, dashing hopes that it would trend down into the new year.
The result keeps upward pressure on interest rates at a time when households are already facing significant cost-of-living challenges.
The Australian Bureau of Statistics annual Consumer Price Index (CPI) for January, at 3.8 percent, was identical to the December annual figure which was a key driver of the latest mortgage rate increase.
ABS head of prices statistics Michelle Marquardt said the largest contributor to annual inflation in January was housing, up 6.8 percent.
This was followed by food and non-alcoholic beverages, up 3.1 percent, and recreation and culture, which rose 3.7 percent.
The “trimmed mean” index, which is a good indicator of underlying trends, had inflation at 3.4 percent in January 2026, up from 3.3 percent in the 12 months to December 2025.
Electricity costs rose 32.2 percent in the 12 months to January, up from 21.5 percent to December.
“Excluding the impact of the Commonwealth and State Government electricity rebates over the previous year, electricity prices rose 4.5 percent in the 12 months to January,” the ABS said. “This reflects annual price reviews by energy retailers in July 2025.”
The full report can be found on the ABS website.
