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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Wednesday’s update will have limited relevance for the RBA, given it will be superseded by December quarter inflation data before its board meeting in February.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.

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