Inflation eased ever so slightly in February, which would have been seen with cautious optimism if we didn’t have a middle-east crisis hanging over the economy:
For the month of February 2026:
📉 Headline CPI was 3.7% YoY (down 0.1%)
📉 Trimmed mean CPI was 3.3% YoY (unchanged)
📉 Non-tradables inflation was 5.0% (up 0.1%)
📉 Tradables inflation was 1.3% (down 0.6%)
Electricity and housing where the two big movers, with electricity prices in particular up a whopping 37% as government subsidies roll out of the data set.
There isn’t much point in analysing these numbers too closely, as we already know that the March print will be a blow out off the back of dramatically higher petrol prices.
However, one key dynamic to note is the continued upward pressure on domestic prices (non-tradeable inflation) which has been offset over the last year by declines in import prices (tradeable inflation). However, the tradeable honeymoon may be over. bunker fuel prices have almost doubled since the start of the month, container freight prices are up 18%, and the Australian Dollar is trending weaker.
While the long-term picture is volatile and heavily dependent on when oil supplies return to normal, in the short term we are likely to see inflation well north of 5.0%.