ANZ-Roy Morgan inflation expectations rose to 4.9% in the week ending July 27, up slightly from June’s monthly average of 4.8%. While down from the early July peak of 5%, the latest figure reflects persistent cost-of-living concerns.
Roy Morgan CEO Michele Levine (pictured) said July’s global conflict played a role in the increase.
“Inflation expectations have spiked in July following the brief ’12 Day War’ between Israel and Iran in late June and early July. The conflict led to an immediate spike in average petrol prices and inflation expectations,” Levine said.
Average petrol prices jumped to $1.86 per litre in mid-July, their highest level in five months, before easing back to $1.78.
“The volatility in energy prices, and inflation expectations, in recent weeks and months shows just how sensitive Australians are to changes in the prices of essential everyday goods – like petrol,” Levine said.
This volatility has helped stall gains in consumer confidence, which held steady at 86.7 for a third consecutive week, according to ANZ-Roy Morgan. While sentiment around household finances and the economy remains subdued, a slight uptick in buying intentions could reflect growing anticipation of an RBA rate cut in August.
Despite elevated expectations, official inflation remains contained. The ABS Monthly CPI estimate for May was 2.1%, marking ten consecutive months within the RBA’s 2–3% target range.
“The good news for Australians is that the official ABS inflation estimates have continued within the Reserve Bank’s preferred target range,” Levine said.
“Looking forward, the Reserve Bank is expected to lower interest rates in two weeks’ time in early August, likely by +0.25% to 3.6%.”
ANZ also expects rate cuts in both August and November, supported by easing inflation and growing incomes.
June inflation expectations by state showed the highest readings in Western Australia (5.5%) and Queensland (5.0%). New South Wales and Victoria followed closely at 4.9%, while South Australia (4.2%) and Tasmania (4.3%) posted the lowest.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
