Australia’s inflation surges to 3.8% in December, surpassing expectations

[Inflation Concept]
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Australia's annual inflation rose to 3.8% in December 2025, up from 3.4% in November and exceeding estimates of 3.6%.

Services inflation reached a two-year high of 4.1%, influenced by holiday travel and rising rents, while goods inflation increased slightly to 3.4%.

The trimmed mean CPI inched up to 3.3% y/y from the prior 3.2%, in line with estimates. Monthly, the CPI rose 1.0%, picking up from a flat print in November.

The S&P/ASX 200 Index [https://seekingalpha.com/symbol/AS51#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] rose 0.2% to around 8,960 in Wednesday morning trade, on track for a fourth consecutive winning streak to hit a fresh three-month high. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] traded around $0.699 on Wednesday, hovering near a three-year high, after a hotter-than-expected inflation print boosted expectations of a rate hike by the Reserve Bank next month.

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