Australia’s Inflation up 3.8 Percent, Power Prices Jump 21 Percent Over the Year

Power prices and housing costs pushed December inflation above the RBA’s target range, fuelling speculation of a rate hike next week.

Treasurer Jim Chalmers speaks in Question Time at Parliament House in Canberra, Australia, on Nov. 5, 2025. Hilary Wardhaugh/Getty Images

Australia’s inflation rate has jumped again, adding pressure to household budgets and raising expectations the Reserve Bank of Australia (RBA) may lift interest rates next week.

New data from the Australian Bureau of Statistics shows inflation rose to 3.8 percent in the year to December, up 3.4 percent in November, moving above the RBA’s 2–3 percent target range.