Australian Inflation Eases in November as Electricity Prices Cool, Core Pressures Persist

Australia’s consumer price index inflation eased more than expected in November, offering some relief to households and policymakers, as slower electricity price growth helped pull headline inflation lower. However, underlying inflation measures remained stubbornly above the Reserve Bank of Australia’s target range, reinforcing uncertainty around the outlook for interest rates.

According to data released by the Australian Bureau of Statistics, CPI inflation rose 3.4% year-on-year in November. This was softer than market expectations of 3.6% and marked a clear slowdown from the 3.8% recorded in October. The easing suggests price pressures are gradually moderating, although they remain elevated by historical standards.

The main driver behind the softer inflation outcome was electricity prices, which continued to rise but at a slower pace than in previous months. In contrast, several major cost components remained firm. Housing costs, food prices, and transport expenses all continued to trend higher, reflecting persistent demand pressures and supply-side constraints across the economy.

Measures of underlying or core inflation showed only limited improvement. The trimmed mean CPI, closely watched by the RBA, came in at 3.2% year-on-year in November, slightly down from 3.3% in October. Despite the modest decline, the reading remained above the central bank’s 2% to 3% inflation target range, highlighting the ongoing challenge of taming price growth.

A breakdown of inflation components showed goods price inflation cooled to 3.3% from 3.8% in October, largely due to easing electricity costs. Services inflation also edged lower to 3.6% from 3.9%, although analysts noted this was partly driven by seasonal factors rather than a broad-based slowdown. The ABS also reported that Black Friday discounting had minimal impact on overall inflation in November.

While the latest CPI data points to some progress, it remains unclear whether the slowdown is sufficient to shift the RBA’s cautious stance. The central bank paused its rate-cut cycle in the second half of 2025 and has signaled that interest rates are likely to remain unchanged in the near term, as inflation has proven more persistent than expected. Recent months have also seen inflation pick up unexpectedly, driven by higher housing and food prices and the gradual removal of federal electricity subsidies, keeping pressure on policymakers to remain vigilant.