Expectations for record high inflation remain high because of increased fuel, rent and food prices, the Melbourne Institute Survey of Consumer Inflationary Expectations revealed yesterday.
The survey’s median expected inflation level remained at 5.9 per cent in July.
The proportion of consumers that expected inflation to fall within the RBA’s target band also fell for the seventh consecutive month to just 7.5 per cent.
“This is just 1.1 per cent higher than the record low observed at June 2000, just prior to the introduction of the GST,” Dr Sam Tsiaplias, a Melbourne Institute research fellow, said.
Dr Tsiaplias said the effect of income tax cuts and the path of crude oil prices would be significant factors to determine whether inflationary expectations fall in the next few months.
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