CPI Inflation

The headline CPI rose by 0.9% in Q1 2025, while the annual rate of headline CPI inflation was unchanged at 2.4%. Annual trimmed mean CPI inflation, which is the RBA’s favourite underlying inflation gauge, declined to 2.9% in Q1, thus coming back to the RBA target range.

The monthly CPI indicator suggested that the annual rate of consumer price inflation ebbed 0.1ppts to 2.4% YoY in February, against market expectations of no change. Annual trimmed mean inflation, which is the RBA’s favoured measure of underlying inflation, declined 0.1ppts to 2.7%, which is very close to the mid-point of RBA target range of 2-3%.

The monthly CPI indicator suggested that the annual rate of CPI inflation remained at 2.5% YoY in January, against the market expectations of a 0.1ppts increase to 2.6%. Annual trimmed mean inflation, which is the RBA’s favoured underlying price growth gauge, also picked up 0.1ppts to 2.8%.

The headline CPI (unadjusted) rose 0.2% in Q4 2024, taking the annual inflation rate 0.4ppts lower to 2.4% (mkt exp. 0.3% QoQ and 2.5% YoY).

The monthly CPI indicator suggested that annual inflation picked up to 2.3% in November after being steady at 2.1% in the previous two months, the lowest level since July 2021. The consensus market expectation was for an increase to 2.2%. Of the core measures, the CPI excluding volatile items and holiday travel rose 0.6% in the month, with annual growth rising 0.4ppts to 2.8%.

The monthly CPI indicator suggested that annual inflation was steady at 2.1% in October, which is the lowest level since July 2021. The headline rate of inflation is being held down below the mid-point of the RBA target range by the impact of household electricity bill relief measures that are being rolled out by Commonwealth and state governments.