Australia’s annual inflation held at 3.8% in January 2026, unchanged from the prior month but topped market forecasts of 3.7%, remaining outside the central bank’s 2–3% target. Services inflation eased to 3.9% from December's two-year high of 4.1%, partly due to lower pharmaceutical prices after the cut in the standard medicine fee. Meanwhile, goods inflation accelerated (3.8% vs 3.4%), driven by a sharp rise in electricity costs (32.2% vs 21.5%) as state rebates expired. Price growth stayed broad-based, with continued rises in food and non-alcoholic drinks (3.1% vs 3.4%), alcohol and tobacco (5.0% vs 4.9%), clothing (5.3% vs 3.4%), housing (6.8% vs 5.5%), furnishings (1.4% vs 2.0%), transport (1.1% vs 1.6%), communication (1.4% vs 1.1%), recreation (3.6% vs 4.4%), education (5.4% vs 5.4%), and financial services (2.4% vs 2.5%). The trimmed mean CPI edged up to 3.4% yoy, above both the prior figure and consensus of 3.3%. Monthly, the CPI rose 0.4%, slowing from a 1.0% gain in December.