Consumers less fearful of CPI outlook
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CANBERRA, Nov 15 AAP
November 15 2012, 1:00PM
Consumers appear less concerned about the inflation outlook, despite recent official price data showing stronger than expected pressures.
The Melbourne Institute's consumer inflation expectations survey for November released on Thursday found households predicting a consumer price index (CPI) of 2.2 per cent over the coming 12 months, down from 2.7 per cent as of October.
This was lowest survey outcome since early 2009 and predicts inflation at the bottom end of the Reserve Bank of Australia's (RBA) two to three per cent inflation target.
"This provides the RBA with a bit of room to stimulate growth should (downward) risks coming out of Europe, the US and China increase," research fellow at the institute Viet Nguyen said.
Dr Nguyen said the increase in the official CPI for the September quarter confirmed the elevated inflation expectation readings between July (3.6 per cent) and September (2.5 per cent).
The CPI jumped 1.4 per cent in the September quarter, which lifted the annual rate to 2.0 per cent from 1.2 per cent in the previous quarter.
Strong inflation expectations can themselves drive up prices as people seek higher wages as compensation.