At a rate of 3.4 per cent, the monthly consumer price index (CPI) remains the “lowest annual inflation since November 2021” according to the Australian Bureau of Statistics head of price statistics Michelle Marquardt.

It was the second month in a row for the CPI to hit 3.4 per cent, which is well off recent highs of 8.4 per cent recorded at December 2022.

ABS data found the most significant contributors to the January annual increase were prices rising for insurance and financial services (up 8.2 per cent), alcohol and tobacco (up 6.7 per cent), housing (up 4.6 per cent), and food and beverages (up 4.4 per cent).

These spikes were partially offset by declining prices for recreation and cultural products (down 1.7 per cent) and accommodation (down 7.1 per cent). The ABS attributes these declines to holiday travel over the Summer.

Electricity prices were also up by 0.8 per cent in the 12 months to January 2024, with the introduction of the Energy Bill Relief Fund for eligible households mostly offsetting pricier energy due to increases in wholesale prices.

“Excluding the rebates, electricity prices would have increased 15.3 per cent in the 12 months to January 2024,” Marquardt said.

Ahead of the release, Treasurer Jim Chalmers warned the monthly readings could be less reliable than the quarterly measure.

“But the overall direction of travel is clear: annual inflation moderated to a two-year low at the end of last year, but we would like it to moderate further and faster,” he said.

The central bank has been lifting interest rates to bring down inflation and, although is getting closer to its two-three per cent target range, is forecasting a prolonged final stretch to get there by 2025.

Construction work done data was also released by the bureau on Wednesday and showed total work up 0.7 per cent over the quarter, driven by engineering.

– With AAP