<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/inflation" rel="" target="" title="Inflation"><span>Inflation</span></a><span> has once again come in hotter than expected, raising the chance of another </span><a href="https://www.9news.com.au/interest-rates" rel="" target="" title="interest rate hike"><span>interest rate hike</span></a><span> early this year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>New data from the Australian Bureau of Statistics showed the </span><a href="https://www.9news.com.au/consumer" rel="" target="" title="consumer"><span>consumer</span></a><span> price index (CPI) rose 3.8 per cent in the 12 months to January.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While that was level with December's figure, it was slightly higher than the 3.7 per cent expected by economists.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/anthony-albanese-evacuated-from-the-lodge-in-canberra-due-to-security-incident/998ef480-4ad4-4cba-a05c-859eed9d64e5"><strong><span>Albanese 'all good' after security threat against prime minister</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In further bad news, the trimmed mean – the </span><a href="https://www.9news.com.au/reserve-bank-australia" rel="" target="" title="Reserve Bank's"><span>Reserve Bank's</span></a><span> preferred measure of underlying or "core" inflation – was also a surprise, rising to 3.4 per cent, above the 3.3 expected by the market. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Both figures are well above the RBA's target band of 2-3 per cent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Many economists and traders were already expecting the RBA to increase the cash rate in its May meeting – </span><strong><span>a forecast today's inflation data will do little to dissuade.</span></strong></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/finance/inflation-australia-january-2026-cpi-interest-rates-implications/6b382a95-929e-4fda-9d88-1df3ed7cc0b0" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"There is certainly almost an inevitability that rates will go up again," 9news political editor Charles Croucher said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In one sliver of good news for anxious borrowers, the fresh figures are only monthly, not quarterly, numbers.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/wisetech-to-cut-up-to-2000-jobs-ai-restructure/e1626bc8-91d7-43db-8390-13ea2e0a6eb5"><strong><span>Aussie tech giant set to cut up to 2000 jobs for AI 'efficiency'</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While the ABS now releases a complete CPI each month, rather than the less comprehensive indicator it used to publish, the RBA is still relying more on the quarterly figures.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"It will take us some time to understand the properties and seasonal patterns of the data," the head of the RBA's economic analysis department, Michael Plumb, said yesterday.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"While we learn about the monthly data, for a time we will continue to focus on the quarterly data for forecasting and assessing underlying inflationary pressures."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The next batch of quarterly numbers won't be released until April – well after the central bank's next interest rate meeting in mid-March.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Bendigo Bank chief economist David Robertson said households are likely to be spared a hike at that meeting, but that a rise to 4.10 per cent in May remains firmly on the table.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/finance/australian-accountants-body-warns-on-sluggish-productivity/395d4536-7f2d-499c-b5ed-c10a3a22bf47"><strong><span>Grim warning on economy by Australia's top accounting group</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"(Inflation) will still be viewed by the RBA as far too high, and combined with last week's jobs data do justify the February 3 hike, but the data won't necessarily translate to another hike in March," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"A range of factors suggest this new tightening cycle will likely be persistent and drawn-out including the resilience of global trade in the face of tariffs and tight domestic labour and housing markets, although we currently only forecast one more hike this calendar year...</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The full quarterly inflation data on April 29 will be the key data point for the May RBA decision, but we will need to see an improvement in underlying inflation to avoid another hike in May."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a 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