Australia’s annual inflation rate climbed to 3.8% in December 2025, up from 3.4% in November, marking the fastest increase in three months. This figure exceeded market expectations of 3.6% and remained above the Reserve Bank of Australia's (RBA) target range of 2-3%. The uptick was driven by rising prices in both goods and services, with a notable increase in electricity costs, which jumped by 21.5% compared to 19.7% in November. Meanwhile, the trimmed mean Consumer Price Index (CPI) saw a slight rise to 3.3% year-over-year from 3.2% the previous month. On a monthly scale, the CPI increased by 1.0% following a period of stability in November.