Australia's CPI has exceeded expectations, with persistent inflation in services and housing, alongside resilient labor data. These factors strengthen the case for a cautious 25bp rate hike by the Reserve Bank of Australia (RBA) in February, notes Deepali Bhargava, ING's Regional Head of Research, Asia-Pacific. RBA on track for cautious rate increase"CPI inflation for December – and therefore for the fourth quarter of 2025 – surprised to the upside. "This suggests that if the RBA does proceed with a February hike, it is likely to be a cautious one, reflecting the delicate balance between supporting growth and containing stubbornly high inflation." (This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)