Annual inflation slows to 3.4 per cent in November
Annual inflation slowed to 3.4 per cent in November as Australians traveled less within the country and electricity bill price increases eased.
The latest figures released by the Australian Bureau of Statistics on Wednesday showed price pressures eased in the 12 months to November, remaining below the 3.8 per cent growth recorded in October.
Economists had expected headline inflation to come in at 3.6 percent for the 12 months to November, following last month’s higher-than-expected figure of 3.8 percent.
The truncated average inflation, a measure of inflation that removes the impact of the largest price movements and is closely watched by the Federal Reserve, fell to 3.2 percent in November from 3.3 percent in October, broadly in line with the bank’s latest forecast.
Housing made the biggest contribution to annual inflation in November (up 5.2%); While electricity costs increased by 19.7%, the increase in rents and new housing costs also attracted attention.
RSM Australia economist Devika Shivadekar said the figures presented a “mixed bag” for the Reserve Bank board, which meets in February to make its next interest rate decision.
“While overall inflation is trending downward, the pace of decline remains moderate, reflecting persistent cost pressures in key sectors,” he said. “Inflation is falling, supporting keeping rates steady, but housing and energy costs remain stubbornly high, signaling underlying price pressures.”
Economists had been expecting multiple interest rate hikes in 2026 after RBA governor Michele Bullock signaled that interest rates would not fall in the first half of 2026. In December, the bank kept interest rates steady at 3.6 percent.
The next key data point ahead of the bank’s February meeting will be a workforce report showing how much capacity is available in the economy and the amount of pressure on wages: a key input for businesses to make pricing decisions.
The Australian stock market rose when the latest inflation figures were released and was trading 0.4 per cent higher at midday.
Millie Muroi is the economics writer for The Sydney Morning Herald and The Age. He was previously an economics correspondent for the Canberra Press Gallery and a banking writer in Sydney.Connect with: excitement or email.
