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The latest Monthly Consumer Price Index (CPI) Indicator for the 12 months to January 2025 rose by 2.5 per cent, remaining unchanged from the previous month’s reading (December 2024), the Australian Bureau of Statistics (ABS) has shown.
According to the ABS, the most significant contributors to this month’s annual movement were alcohol & tobacco (up 6.4 per cent), food & non-alcoholic beverages (up 3.3 per cent), and housing that rose by 2.1 per cent.
However, the annual rise was partially offset by a large fall in electricity prices, which declined by 11.5 per cent, a smaller drop than for the year to December 2024 (17.9 per cent).
The ABS said that excluding volatile items and holiday travel from the annual trimmed mean and CPI can shed more light on how inflation has trended when prices for some items shift significantly.
ABS head of prices statistics, Michelle Marquardt, said: “Annual trimmed mean inflation was 2.8 per cent in January, up slightly from 2.7 per cent in December.
“The CPI excluding volatile items and holiday travel measure rose 2.9 per cent in the 12 months to January, compared to a 2.7 per cent rise in the 12 months to December.”
The 2.1 per cent rise for the housing group showed an increase from the 1.5 per cent annual rise in the 12 months to December; however, both rents and new dwelling prices showed further easing in January.
New dwelling prices declined to 2 per cent from 2.3 per cent, marking the lowest annual rise in new dwelling prices since June 2021, while rents rose 5.8 per cent following a 6.2 per cent rise in December. The easing in rental price growth reflected recent lifts in vacancy rates across the capitals, according to the ABS.
On the electricity decline, Marquardt 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.”
Excluding all of the Commonwealth and state government rebates, prices for electricity would have fallen 1.2 per cent during this period, compared to an annual fall of 0.9 per cent to December 2024.
Commenting on the figures, CreditorWatch chief economist Ivan Colhoun said the January monthly CPI had “favourable news on the trends for rents and new dwelling construction costs, along with much (but not all) of the Food, Clothing and Footwear, and Household Goods and Electrical sub-groups”.
“This is likely to reveal that the RBA’s unusual February monetary policy Statement forecasts are bettered on the inflation front, allowing for some further moderate easing in interest rates” Colhoun said.
“The RBA’s clear signal is that this will depend principally on quarterly CPI readings, suggesting the next most likely time for a follow up 25bps interest rate reduction is at the May board meeting, the second of the new monetary policy board.”
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