Australia's consumer price index (CPI) rose 3.8% in the 12 months to December 2025, up from a 3.4% increase in the year to November 2025, the Australian Bureau of Statistics reported Wednesday.

The largest contributors to annual inflation were housing, up 5.5%, followed by food and non-alcoholic beverages, which rose 3.4%, and recreation and culture, which grew 4.4%.

"Trimmed mean inflation was 3.3% in the 12 months to December 2025, up from 3.2% in the 12 months to November 2025," said Michelle Marquardt, the bureau's head of prices statistics.

Annual goods inflation rose to 3.4% in the year to December 2025, up from 3.3% in November 2025, largely due to electricity prices rising around 22%, compared with nearly 20% previously, while annual services inflation rose to 4.1% from 3.6%, driven by domestic holiday travel and rents, per the report.

Fruit and vegetable prices rose 4% in the 12 months to December 2025, up from a 2.7% growth in November 2025, while meat and seafood prices climbed 4.4% over the same period.

The CPI increased by 0.6% in the December 2025 quarter, and the trimmed mean CPI based on the pre-October 2025 method rose by 0.9%, the report added.