Sydney, Jan 28, 2026, 17:41 AEDT — After-hours
Wesfarmers Limited (ASX:WES) shares slipped 0.65% to close at A$84.19 on Wednesday. Traders attributed the dip to the unexpected inflation data, as the company itself released no new announcements during the session. (Wesfarmers)
Timing is crucial. Australia’s consumer price index climbed 3.8% in the year ending December 2025, the statistics bureau reported, sparking renewed speculation that interest rates will rise. “The 3.8 per cent annual CPI inflation to December was up from 3.4 per cent to November,” said ABS prices head Michelle Marquardt, noting housing drove most of the annual inflation gain. (Australian Bureau of Statistics)
The hotter inflation reading thrust the Reserve Bank of Australia back into the spotlight before its Feb. 3 policy meeting. Interest-rate swaps — derivatives investors use to gauge central bank moves — signaled a 73% chance of a rate hike, according to Reuters, after the RBA’s trimmed-mean CPI, which excludes the biggest price swings, came in above expectations. ANZ’s Adam Boyton believes the bank will conclude “demand is running ahead of supply,” while EY’s chief economist Cherelle Murphy said “the case for tighter monetary policy” is clear. Both predict a 25-basis-point increase, or 0.25 percentage point. (Reuters)
The broader market followed suit. The S&P/ASX 200 closed down 0.09% at 8,933.9, slipping into negative territory after the inflation data dropped, according to an ABC market wrap. (ABC)
Wesfarmers, a major player in Australian retail with brands like Bunnings and Kmart, is closely watched as a barometer of household spending. But that link can work against it when interest rate fears rise and mortgage repayments stay high. (Reuters)
Rising rate expectations squeeze retailers from both ends. They push up discount rates in valuations and may also dampen demand if consumers hold off on major buys and home upgrades.
For Wesfarmers, the key issue is whether Wednesday’s inflation figure proves to be a one-time shock or sparks sustained pressure on bond yields through February. Either way, the stock faces a policy meeting that’s suddenly back on the radar.
There’s a clearer downside risk investors should watch. If the RBA hints it might need more than just one “insurance” hike, consumer stocks sensitive to rates could face ongoing pressure—even if no company reports a direct miss.
Wesfarmers is set to release its half-year results on Thursday, Feb. 19. An analyst briefing will follow at 10:00am AWST / 1:00pm AEDT.
