Australian Inflation Expectations Ease After Petrol Price Spikes

Australia's inflation expectations eased in July, according to the latest ANZ-Roy Morgan Inflation Expectations reading. The measure stood at 5.9 per cent for the week of July 20-26, down 0.1 percentage points from June.

The recent petrol price spike and three consecutive weekly increases in inflation expectations have put the prospect of additional Reserve Bank of Australia (RBA) rate increases back in focus ahead of its mid-August meeting.

Average retail petrol prices increased from $1.60 per litre during June 22-28 to $1.82 per litre during July 20-26, a rise of 22 cents per litre or 14.2 per cent since the Albanese government halved the fuel excise cut introduced in early April.

The official Consumer Price Index (CPI) stood at 4 per cent in the year to May 2026, above the RBA's preferred target range of 2-3 per cent over the economic cycle. This led the RBA to begin a cycle of interest rate increases earlier this year, raising rates three times since February.