Surprise dip in inflation eases pressure but RBA unlikely to cut rates

November annual inflation fell to 3.4% from 3.8%, with monthly prices broadly flat and the trimmed mean also down; electricity rebates and rents were key contributors. The Reserve Bank is unlikely to cut rates next month, and attention will turn to the CPI release on 28 February covering the December quarter.

November annual inflation fell to 3.4% from 3.8% in October, a lower-than-expected result. The Bureau of Statistics now publishes CPI data monthly rather than quarterly, which provides more frequent information but makes each release less decisive. The trimmed mean also declined in November and monthly prices on average showed no change. The Reserve Bank is unlikely to find cause in these figures to cut rates next month and is placing more weight on the upcoming quarterly data. Key facts: - Annual CPI was 3.4% in November, down from 3.8% in October. - Monthly prices in November showed a 0% change, compared with a 0.4% rise in November 2024, which contributed to the fall in the annual rate. - The trimmed mean measure of underlying inflation also fell in November. - Electricity prices and rents together accounted for about 20% of inflation over the past year. - There were large state differences: Brisbane recorded about 5.1% annual inflation while Perth recorded about 2.8%, driven in part by the timing of electricity rebates (Brisbane electricity up 456% year‑on‑year, Perth down 29%). - The ABS found Black Friday sales had little net effect on the overall annual CPI. Summary: The lower November reading reduces near-term upside pressure on inflation but includes volatile influences such as electricity rebate timing, which complicate interpretation. The Reserve Bank is unlikely to cut rates next month, and market and policy attention is likely to focus on the CPI release due 28 February that will report December month and quarter figures.