Australia’s headline inflation rate has come in below economist expectations, lifting hopes that the Reserve Bank will hold off hiking interest rates next month.

After surging to 3.8 per cent on an annual basis in October, the Australian Bureau of Statistics reported on Wednesday that the consumer price index retreated to 3.4 per cent in November.

The consensus of forecasters was for the headline figure to fall to 3.6 per cent.

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But following a resurgence in inflation in the second half of 2025, the first major economic snapshot of the year won’t reassure the central bank that price pressures are back under control.

The bank places greater emphasis on the trimmed mean, which excludes volatile items to show the underlying pulse of inflation.

The trimmed mean fell from 3.3 per cent to 3.2 per cent after rising 0.3 per cent month to month, still above the RBA’s two to three per cent target band.

Headline inflation was underpinned by the timing of energy rebates rolling off in Queensland, with electricity costs up 19.7 per cent in the 12 months to November.

But the RBA will be less concerned by such temporary factors and will pay closer attention to stickier items such as new dwelling costs and market services.

New dwelling prices rose 2.8 per cent in the 12 months to November 2025, up from a 1.7 per cent rise to October 2025, although rents decelerated from 4.2 per cent to 4 per cent.

Given the ABS’s monthly inflation measure is still relatively new and yet to iron out seasonal kinks, the central bank will wait until the December quarter inflation print, due out in late January, before forming a decision on rates.

Ahead of the release, NAB senior economist Taylor Nugent said a 0.3 per cent monthly rise in the trimmed mean would put the quarterly figure on track for a 0.9 per cent, which would be “too hot for comfort” for the RBA.