Expectations grow for interest rate hike next week after Australia’s inflation jumps to 3.8%

The Guardian - World NewsCenter-LeftEN 2 min read 100% complete by Patrick Commins Economics editorJanuary 28, 2026 at 02:57 AM

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Australian inflation rose to 3.8% in December, exceeding expectations and increasing the likelihood of an interest rate hike by the Reserve Bank of Australia (RBA) at its meeting next Tuesday. The jump, driven by rising housing, electricity, and food costs, prompted ANZ economists to predict a rate increase to curb demand and ensure inflation returns to the RBA's 2-3% target range. While government electricity subsidy expirations contributed to the surge, the RBA's preferred trimmed mean measure also rose significantly. Strong jobs figures further solidified expectations of a rate hike, with financial markets now predicting a 60% chance. The Australian dollar subsequently rose above US70 cents following the release of the inflation data.

Key Entities & Roles

Key Player Opposition Context

BetaShares 30% David Bassanese 30% Queensland 40% Western Australia 40% Adam Boyton 50% ANZ ×260% Australia 70% Australian Bureau of Statistics ×380% Reserve Bank of Australia ×290%

Keywords

interest rate hike 100% inflation 90% reserve bank 80% consumer prices 70% monetary policy 60% electricity prices 50% cost of living 50% housing costs 50% australian economy 40%

Sentiment Analysis

Negative

Score: -0.30

Source Transparency

Source

The Guardian - World News

Political Lean

Center-Left (-0.40)

Far LeftCenterFar Right

Classification Confidence

90%

Geographic Perspective

Australia

This article was automatically classified using rule-based analysis. The political bias score ranges from -1 (far left) to +1 (far right).

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interest rate hike inflation reserve bank consumer prices monetary policy electricity prices cost of living housing costs australian economy

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