Aussie inflation expectations hit 3-year high

From Roy Morgan Research:

In August 2021 Australians expected inflation of 4.3% annually over the next two years, up 0.2% points and the highest Inflation Expectations for nearly three years since November 2018. Inflation Expectations are now up 1.1% points since the pandemic low of 3.2% a year ago in August 2020.

Inflation Expectations are still 0.4% points below their long-term average of 4.7% but are now 0.8% points higher than the 2020 monthly average of 3.5%.

Inflation Expectations are up the most for L-NP and Greens supporters from a year ago

A look at Inflation Expectations by Federal Voting Intention shows big increases across the board from a year ago, and up significantly from two years ago prior to the COVID-19 pandemic.

Inflation Expectations for L-NP supporters increased 1.1% points from a year ago to 4.2% in August and are now 0.7% points higher than two years ago in August 2019. In fact, the Inflation Expectations of L-NP supporters are now at their highest for nearly seven years since November 2014.

The Inflation Expectations of Greens supporters have increased faster than any other over the last year and are up 1.5% points to 3.9% – but are still lower than supporters of all other parties. The Inflation Expectations for ALP supporters are at 4.2% in August, up 0.9% points from a year ago and now 0.5% points higher than two years ago in August 2019…

Roy Morgan CEO Michele Levine says Inflation Expectations increased to 4.3% in August to be at their highest for nearly three years since November 2018, and are now up for three months in a row for the first time since early 2014:

“The increase in Inflation Expectations over the last year is the largest increase in the measure for a decade since increasing by 1.2% points in 2010-11 during the height of the ‘Mining Boom’. The increase has been across a range of categories but there are certain groups which are seeing faster increases than others”…

Full report here.

Unconventional Economist

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