The Consumer Price Index (CPI) rose 3.8 per cent in the 12 months to December 2025, according to the latest data from the Australian Bureau of Statistics (ABS). 

Michelle Marquardt, ABS head of prices statistics, said: ‘The 3.8 per cent annual CPI inflation to December was up from 3.4 per cent to November.’

The largest contributor to annual inflation in December was Housing, up 5.5 per cent. This was followed by Food and non-alcoholic beverages, up 3.4 per cent, and Recreation and culture, which rose 4.4 per cent.

All groups CPI, Australia, monthly and annual movement (%)

When prices for some items change significantly, measures of underlying inflation like the Trimmed mean can give more insights into how inflation is trending.

‘Trimmed mean inflation was 3.3 per cent in the 12 months to December 2025, up from 3.2 per cent in the 12 months to November 2025,’ Ms Marquardt said.

All groups CPI and Trimmed mean, Australia, annual movement (%)

a. Annual movements prior to April 2025 are calculated by comparing each quarter to the same quarter in the previous year. From April 2025, these movements are calculated by comparing each month to the same month in the previous year.

Annual Goods inflation was 3.4 per cent in the 12 months to December, up from 3.3 per cent to November. The main contributor was Electricity, which rose 21.5 per cent in the 12 months to December. 

Annual Services inflation was 4.1 per cent in the 12 months to December, up from 3.6 per cent to November. The main contributors were Domestic holiday travel and accommodation (+9.6 per cent) and Rents (+3.9 per cent).

CPI Goods and Services components, annual movement (%)

a. Annual movements prior to April 2025 are calculated by comparing each quarter to the same quarter in the previous year. From April 2025 these movements are calculated by comparing each month to the same month in the previous year

Annual Housing inflation was 5.5 per cent to December, driven by Electricity costs, which rose 21.5 per cent in the 12 months to December. The increase in Electricity costs mostly related to State Government electricity rebates in Queensland and Western Australia being used up by households. This was up from a 19.7 per cent rise in the 12 months to November.

Excluding the impact of the Commonwealth and State Government electricity rebates over the previous year, electricity prices rose 4.6 per cent in the 12 months to December. This was unchanged from the 12 months to November and reflects annual price reviews from energy retailers in July 2025. 

Electricity Index, Australia