Australia’s consumer price index (CPI) for January has held steady, although a rise in core inflation has diminished expectations for a potential second interest rate cut in the early part of the year. According to the latest data from the Australian Bureau of Statistics (ABS), overall inflation remained at 2.5 per cent for the year ending January, which was an improvement over market predictions that anticipated a slight uptick to 2.6 per cent.
However, the trimmed mean—a crucial indicator of core inflation—unexpectedly rose to 2.8 per cent. While this figure still sits within the Reserve Bank of Australia’s (RBA) target range, it is above the 2.6 per cent that economists had forecasted. This slight increase in core inflation indicates a potential shift in the economic landscape, causing analysts to reassess their views on future monetary policy and interest rates.