Australia: Inflation rises more than expected in November
Latest reading: Inflation edged up to 2.3% in November from 2.1% in October, slightly above both market expectations and the lower bound of the 2.0–3.0% target band of the Reserve Bank of Australia (RBA). Looking at the details of the release, prices for transport declined at a softer pace, while housing and textile costs gained traction in November, outweighing slower price pressures for food.
Meanwhile, the trend pointed down, with annual average inflation falling to 3.1% in November (October: 3.3%). November’s result marked the lowest reading since February 2022. The annual trimmed mean—a measure of core inflation that is closely watched by the RBA—fell to 3.2% in November from 3.5% in October.
Lastly, consumer prices rose 0.48% in monthly terms in November, accelerating from October’s 0.08% increase.
Outlook: Our panel expects price pressures to decelerate toward the lower bound of the RBA’s target band in H1. A fading high base of comparison and stronger economic activity will then fan inflation, though it should remain within target. In 2025 as a whole, tight financing conditions and a looser labor market will push inflation down from 2024 levels to average within target for the first time since 2021. Faster wage growth and premature monetary policy easing are upside risks.
Meanwhile, a majority of our panelists still expect the RBA to start cutting rates at its 17–18 February meeting despite November’s upside surprise in headline inflation, given the decline in the annual trimmed mean and continued sluggishness in the economy.