Inflation Expectations rebound in July to 3.4% as COVID-19 returns

Original article by Roy Morgan
Market Research Update – Page: Online : 10-Aug-20

In July, Australians expected inflation of 3.4% annually over the next two years, up 0.2% points on the record low in June. Inflation Expectations are down 0.7% points on a year ago. For much of Australia the month of July began with hope that the COVID-19 pandemic was successfully being dealt with, but as the month progressed the virus re-emerged. This was particularly evident in Melbourne which progressively introduced new restrictions throughout the month. Sydney also experienced renewed outbreaks during the month, with restrictions being re-imposed to limit gathering sizes at certain venues. With this in mind the increase in Inflation Expectations in July were driven by increases in Australia’s largest cities of Sydney (up 0.1% to 3.4%), Melbourne (up 0.6% to 3.4%) and Brisbane (up 0.1% to 3.5%). Inflation Expectations are split significantly on gender lines, with women expecting annual inflation of 4% over the next two years while men expect inflation of only 2.8%. Roy Morgan CEO Michele Levine says the rebound in Inflation Expectations in July follows three successive declines from April to June, and is the largest monthly increase in the measure so far in 2020.


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