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Australian consumer inflation expectations picked up further in March, adding to worries about an upward price spiral, a survey showed today.
The Melbourne Institute consumer inflationary expectations survey found the median expectation of price increases in the coming year rose to 4.6 per cent, from 4.5 per cent in February.
That was the sixth straight reading above 4 per cent and well above the Reserve Bank of Australia's (RBA) target band of 2 per cent to 3 per cent.
The proportion expecting inflation to move within the band fell to 11.8 per cent in March, from 12.7 per cent, the lowest since June 2000.
The proportion of respondents expecting inflation above the target band rose to 64.2 per cent from 62.6 per cent, the highest since May 2007.
The RBA has repeatedly warned that inflation expectations were picking up and there was a danger this could feed into higher wage claims.
The central bank raised its benchmark interest rates to 7.25 per cent last week in an attempt to restrain inflation. Core inflation rose at an annual rate of 3.6 per cent last quarter, the fastest pace in 16 years.
- REUTERS
