Australia’s inflation expectations jumped to a ten-year high in May, boosting the Australian central bank’s chances of accelerating interest rates in the coming months.
The Melbourne Institute’s monthly average cut-off inflation index rose 0.7% in May to its highest level since 2009.
On an annual basis, the index stood at 4% or 6.5% on an annual basis.
The truncated average is the central bank’s preferred measure of price pressures on the economy.
The RBA raised interest rates for the first time since 2010 in May, citing strong inflationary pressures.
The Bank meeting on Tuesday is expected to endorse a new formal interest rate hike, with some economists expecting more than usual.
The official interest rate stands at 0.35%, with inflation nearing a 20-year high.
The Melbourne Institute index rose 1.1% in May, to 4.8% year-on-year.
The monthly increase is attributed to the 4.5% recovery in fuel prices and by 2.3% in rental prices.
Source: Capital
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