The Australian Bureau of Statistics has reported that the consumer price index rose 3.8% in the 12 months to December 2025, marking an acceleration from the 3.4% recorded in November 2025.
This uptick reflects persistent price pressures across several key sectors of the economy.
Michelle Marquardt, the ABS head of prices statistics, noted that while the headline figure climbed, underlying inflation—measured by the trimmed mean—also edged higher to 3.3%.
The primary driver of this annual increase was the housing sector, which surged 5.5%, followed closely by a 4.4% rise in recreation and culture and a 3.4% increase in food and non-alcoholic beverages.
Specific volatility was observed in essential services, with Electricity prices soaring by 21.5% over the year.
This dramatic spike was largely attributed to the exhaustion of state government electricity rebates in Queensland and Western Australia, rather than base price increases alone; excluding the impact of these rebates, electricity prices actually rose a more modest 4.6%.
Additionally, the services sector experienced a jump to 4.1% annual inflation, fueled by a 9.6% increase in domestic holiday travel and accommodation and a 3.9% rise in rents.