Investing.com-- Australian consumer price index inflation rose more than expected in November, while underlying inflation also remained above the Reserve Bank of Australia’s target range, presenting a hawkish outlook for interest rates.
CPI inflation rose 2.3% year-on-year in November, data from the Australian Bureau of Statistics showed on Wednesday. The reading was higher than expectations of 2.2% and also picked up from the 2.1% seen in the prior month.
CPI inflation excluding volatile items and holiday travel rose to 2.8% in November from 2.4% in the prior month.
Underlying inflation, as represented by annual trimmed mean inflation, fell to 3.2% in November from 3.5% in October, but remained above the RBA’s 2% to 3% annual target range.
Food and housing costs were the biggest contributors to November’s inflation reading, while electricity prices also fell at a slower pace from the prior month as the effects of recent government rebates were baked into price pressures.
Wednesday’s data showed Australian inflation remained sticky, presenting a hawkish outlook for interest rates in the country. The RBA is widely expected to begin cutting rates later, rather than sooner in 2025, amid dwindling confidence that inflation is easing.
Strength in Australia’s labor market also gives the RBA less impetus to cut rates. The central bank only expects inflation to sustainably fall within its target range by late-2026.
The central bank has also offered scant cues on when it could begin cutting interest rates, making it an outlier among its global peers.