Monthly CPI rises 2.5% in 12 months to January
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The news: The monthly consumer price indicator rose 2.5% in the 12 months to January 2025 — the same annual pace as the previous month.
Economists had expected a modest increase on the December data in headline terms, owing to some government electricity rebates coming to an end.
The numbers: Major contributors over the 12 months were food and non-alcoholic beverages, up 3.3%, housing up 2.1% and alcohol and tobacco up 6.4%.
Looking at the critical trimmed mean measure, annual inflation was 2.8%, up from 2.7% in December. When excluding volatile items and holiday travel, CPI rose 2.9% over the period, compared to 2.7% in the year to December.
The context: This is the first inflation data published since the Reserve Bank cut interest rates at its February meeting for the first time in over four years. This data pre-dates the 25 basis point cut.
Analysts will treat this monthly figure with caution as it is heavily skewed by goods rather than services.
Electricity saw an increase largely due to Queensland households exhausting their state government energy rebates. Although electricity prices were 11.5% lower than a year ago, this represented a smaller difference than in December when energy bills were 17.9% lower. Without federal and state rebates, prices would have been 1.2% lower over the 12 months to January.
What they said: "Electricity rebates lower the price of electricity for households. The Queensland government introduced a one-off electricity rebate of $1,000 from July 2024. This rebate exceeded the average electricity bill for Queensland households. The impact of the rebates was lower in January than December as some households had exhausted the full value of the rebate," said ABS head of prices statistics Michelle Marquardt.
The source: Australian Bureau of Statistics media release
