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Key events
Inflation figures due at 11.30am
The first economic snapshot of the year could show a slowdown in inflation but perhaps not enough to prevent the Reserve Bank hiking interest rates, Australian Associated Press reports.
Hopes of further rate relief were dashed by a resurgence in inflation in the second half of 2025, with analysts and bond traders predicting the central bank’s next move to be up rather than down.
Economists expect the Australian Bureau of Statistics will today reveal the consumer price index fell from 3.8% to 3.6% in November.
Importantly, NAB senior economist Taylor Nugent forecasts the less-volatile trimmed mean figure will rise 0.3% over the month, or 3.3% year-on-year.
Wednesday’s update will have limited relevance for the RBA, given it will be superseded by December quarter inflation data before its board meeting in February.
But a 0.3% rise in the trimmed mean would put the quarterly figure on track for a 0.9% increase, which would be “too hot for comfort” for the RBA, Nugent said.
Given that would be 15 basis points higher than the RBA’s latest forecasts, NAB expects the board will be forced to hike rates in February, with another hike likely to come in May.
The November CPI will be pushed up by the timing of some energy rebates rolling off.
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.
Eelemarni Close-Brown
As eastern Australia prepares for a prolonged period of heat this week, here’s how you can keep yourself cool at home cool in a heatwave.
If you have blinds or curtains – particularly on east and west-facing windows – shutting them early in the day will limit thermal radiation from heating up your home.
Just like trapping the heat during cooler months, closing internal doors will keep the cool air where you need it the most, while a door snake will prevent cool air from escaping and warm air from entering.
Take your cooking outside using a barbecue or camping stove, and try to limit using your oven and dishwasher during the day as home appliances can generate heat.
On Tuesday afternoon, Victoria’s deputy chief health officer, Dr Evelyn Wong, also suggested “wearing loose and light clothing, keeping your skin wet with a spray bottle or a damp sponge, or having a cool shower”.
The City of Sydney’s heat fact sheet advises buying cool packs to keep in the freezer, or filing a sandwich bag with water and freezing it for an easy homemade alternative.
Here’s the full story:
Human remains on WA Beach believed to be missing snorkeller
Human remains that washed ashore on a Western Australian beach are believed to be a missing 32-year-old snorkeller.
The man was reported missing off Ledge Point beach, north of Perth, on the afternoon of New Year’s Day. Despite a big air and sea search, he was not found.
Just after 7am on Tuesday, police were told the remains had washed ashore on Fence Reef Beach, north of Ledge Point, WA police said.
While formal identification is yet to be completed, police believe it is the missing man.
His death is not being treated as suspicious and a report will be prepared for the coroner.
Penry Buckley
Worst heatwave since Black Summer bushfires forecast
Swathes of southern and eastern Australia are bracing for extreme temperatures in the first of several days in what is expected to be the worst heatwave since the Black Summer bushfires.
Victoria and South Australia are forecast to bear the brunt of the heat today, according to the Bureau of Meteorology. Most parts of Victoria are forecast to be in the low to mid-40s, with Melbourne predicted to hit 42C, its first 40C January day since 2020. Temperatures as high as 46C are expected in northern Victoria.
The BoM said Adelaide would experience a maximum temperature of 42C on Wednesday, with the heat remaining in the low-40s across the metropolitan region into Thursday.
In the South Australian coastal city of Port Augusta and in Tarcoola in the far north, temperatures are forecast to reach as high as 47C by Thursday.
Western NSW will share in the high temperatures on Wednesday, with Broken Hill forecast to hit 42C, but Sydney is not forecast to climb into the high 30s and low 40s until later in the week.
The BoM’s Angus Hines told Guardian Australia temperature records could be broken this week.
There’s going to be lots of places that are within sight of their temperature records. Most places that have a really long data history, potentially will be a degree or a couple of degrees below their all-time records, but I anticipate that there could be some areas maybe with slightly shorter data history that could set some records.
The BoM has advised of the risk of heat-driven fire danger, with dry thunderstorms and windier conditions later in the week expected to add to the risk. Widespread total fire bans are expected, with people warned to charge their devices in case of power outages and watch out for the signs of heatstroke.
Read more here:
Welcome
Good morning and welcome to our live news blog. I’m Martin Farrer with the best overnight stories and then Nick Visser will pick up the reins.
Swathes of southern and eastern Australia are bracing for extreme temperatures in the first of several days in what is expected to be the worst heatwave since the Black Summer bushfires. More details in a moment.
The first economic snapshot of the year comes at 11.30am today, which is expected to show a slowdown in inflation from 3.8% to 3.6% – but perhaps not enough to prevent the Reserve Bank increasing interest rates. More coming up.
And human remains have washed up on a Western Australian beach, believed to be a snorkeller who went missing on New Year’s Day.
