Inflation expectations tick up as petrol prices lift
There’s been a dip in in consumer confidence as rising petrol prices nudge inflation expectations, which could be of note to the Reserve Bank.
Photo: AAP/Paul Miller
Pain at the bowser could be nudging inflation expectations higher.
A weekly consumer check-in by ANZ and Roy Morgan revealed a 0.5 percentage point lift in inflation expectations to 5.4 per cent, unwinding falls over the past two weeks.
ANZ economist Madeline Dunk said the pick up in inflation expectations could be of note of the Reserve Bank regarding interest rates, given the strength in fuel prices.
Petrol prices have averaged over $2 a litre for the past six weeks, with the RAA petrol price tracker showing prices across Adelaide ranging from $2.13 to $2.34 this morning.
The measure of where consumers expect prices to go is important as it can influence actual inflation.
When people come to expect high inflation, businesses can put up prices more quickly and workers may demand higher wages.
The weekly survey also recorded a 3.4 point fall in consumer confidence, which follows several weeks of improvement.
The measure is still well below long run averages to reflect the high but moderating cost of living and interest rate increases.
Dunk said each of the five subindices declined, with a particularly sharp decline in ‘future financial conditions’ recorded.
“Confidence among those households paying off a mortgage declined by 8.1 points, while it fell 2.9 points for renters and 0.3 points for households who own their home outright.”
-AAP
