Underlying inflation has ticked up slightly for the first month of 2026, coming in at an annual rate of 3.4 per cent.

The Reserve Bank’s preferred measure of consumer prices, trimmed mean inflation, increased 0.3 per cent over January, according to Bureau of Statistics figures released on Tuesday.

The figure strips out the most volatile price rises and falls, giving a clearer read of underlying price growth.

January’s reading is higher than the last reading of 3.3 per cent for the 12 months to December.

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Headline inflation, which includes a broader spread of goods and services, held steady at 3.8 per cent in the year to January, the same as the December reading.

Speaking before the data was released, Finance Minister Katy Gallagher said it would be closely watched as the government prepares its next federal budget, due to be handed down in May.

“We did see last month that inflation ticked up a little and we saw largely as a result of some of those temporary energy rebates coming off that influenced those,” she told ABC Radio on Wednesday.

“The job for the government remains the same, being conscious that the decisions we make right for the economic circumstances of the time. So we’ll see what that data says, and we’ll make decisions based around that.”

The largest contributors to inflation were the cost of housing, food and recreation and culture.

The stubborn increases in consumer prices have caused the Reserve Bank’s board to consider further interest rate rises.

The bank lifted the cash rate to 3.85 per cent in February, with further rises expected later in 2026.

The rise of inflation has also led to a decline in real wages for the first time in more than two years.

-with AAP