15.01.202600:31:53UTC+00Australia Inflation Expectations Stay Elevated

Australia's consumer inflation expectations were at 4.6% in January 2026, a marginal change from 4.7% the previous month, indicating that households continue to anticipate sustained price pressures. This figure comes in the wake of the Reserve Bank of Australia's decision to maintain the cash rate at 3.6% for the third consecutive meeting in December. At this meeting, policymakers acknowledged that inflation has significantly reduced from its peak in 2022, although recent data suggests a resurgence. The headline Consumer Price Index (CPI) decreased to 3.4% year-on-year in November, marking the lowest level since August, yet it remains above the RBA's target of 2–3%. The trimmed mean CPI also eased to 3.2% from October's eight-month high of 3.3%. Governor Michele Bullock recently noted that inflation during the September quarter was slightly higher than anticipated, with temporary factors contributing, but with an indication of ongoing persistence in various components. The board assessed that the risks to inflation have shifted modestly upwards, while downside risks, especially from international sources, have diminished.