New figures from the Australian Bureau of Statistics show inflation has increased but remains much lower than its peak and much lower than we inherited.
This increase was unwelcome but unsurprising.
Temporary factors drove some of the tick up, with inflation still expected to decline over time.
Inflation has eased substantially since we came to office but is still higher than we'd like.
Headline inflation was 3.8 per cent through the year to the month of December. This compares to 3.4 per cent through the year to November.
The monthly measure of underlying inflation was 0.2 per cent in the month, down from 0.3 per cent in the previous month. In annual terms, it was 3.3 per cent.
The quarterly measure of underlying inflation was 0.9 per cent in the December quarter, down from 1.0 per cent in the September quarter. This measure of underlying inflation was 3.4 per cent through the year to the December quarter 2025, up from 3.0 per cent in the year to the September quarter.
Today's data shows our inflation challenge reflects a mix of temporary factors and some more persistent pressures.
Temporary factors, like the end of energy rebates and a rise in travel prices, contributed to the result, and there are some more persistent pressures in areas like housing.
The data also reflects the recovery we've seen in the private sector.
We've seen around the world that inflation doesn't always moderate in a straight line - having increased recently in some advanced economies.
When we came to office, headline inflation was 6.1 per cent and rapidly rising, it's now much lower than that.
Underlying inflation was around five per cent but it is now much lower.
Under Labor, inflation is much lower than we inherited, economic growth is picking up, business investment is strengthening, unemployment is low, participation is at near record highs, real wages are growing, debt is down, and the budget is in better nick.
We've made a lot of progress together on the economy but the job's not done because people are still under pressure and that's why we continue to roll out responsible cost‑of‑living relief at the same time as we modernise Australia's economy.
The three big economic priorities for the Albanese Government this year are addressing inflation, productivity and global uncertainty, and these figures show why that's the right approach.
