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flag Australia's inflation rose to 3.8% in December 2025, prompting expectations of a rate hike in early 2026.

flag Inflation in Australia exceeded projections and increased pressure on the Reserve Bank of Australia to raise interest rates, rising to 3.8% in December 2025 from 3.4% in November. flag Expectations of a rate increase in early 2026 have been heightened by the increase, which was caused by rising housing, electricity, and food costs. flag Market analysts predict a 75% chance of a 0.25 percentage point increase, so the RBA must strike a careful balance between promoting economic growth and containing inflation. flag The central bank is anticipated to prioritize price stability based on incoming economic data, despite the warnings of some, such as ACOSS, that additional hikes would exacerbate financial hardship.

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