Inflation expectations up 0.1% to 4.9% in January; supporters of small parties have the highest inflation expectations

Data for the Inflation Expectations series is drawn from single source Roy Morgan who surveyed an average of 4,600 Australians aged 14 and over per month over the past decade from April 2010 to January 2022 and includes interviews with 6 068 Australians aged 14 and over in January 2022. .

In January 2022, Australians expected inflation to be 4.9% per year over the next two years, up 0.1% from December 2021. The level of inflation expectations in January is equal to the seven-year high reached in November 2021 – the highest since November 2014.

Inflation expectations are now 0.2% higher than the long-term average of 4.7% and 1.3% higher than a year ago in January 2021 (3.6%).

Inflation expectations are highest for those who vote for smaller parties and independents

A look at inflation expectations by voting intention in January 2022 clearly have the highest inflation expectations at 5.8%, up 1.5% since June 2020.

In the 2019 federal election, more than one in seven voters (14.9%) voted for small parties and independents. This is an increase of 1.8% since the 2016 federal election and 8.3% since the 2010 federal election – a growing portion of the electorate.

There is little difference between the inflation expectations of ALP supporters (4.8%) and L-NP supporters (4.6%), both of which are slightly below the national average ( 4.9%). The inflation expectations of supporters of the major parties have both increased by 1.8% since the low point reached in June 2020.

Green supporters have the lowest inflation expectations of all, at just 4.2%, an increase of just 1% since the low reached in June 2020 (3.2%).

Inflation expectations by voting intention: June 2020 (record low) cf. January 2022

Source: Roy Morgan Sole source: June 2020, n=5,767, January 2022, n=6,068. Based: Australians 14+.

Inflation expectations are significantly higher in rural areas (5.2%) than in capital cities (4.7%)

Inflation expectations have been consistently higher in rural areas than in capital cities since bottoming out in mid-2020 at the start of the pandemic.

At the state level, inflation expectations were highest in Tasmania at 5.5%, a state with a large regional population.

Inflation expectations were clustered around the national average in New South Wales (5.0%), Victoria (4.9%), South Australia (4.9%) and Queensland (4. .8%). These four eastern states were hit hard by the ‘Omicron strain’ outbreak of COVID-19 in January, with millions of Australians in these states forced into self-isolation and time off from work.

Western Australia, the only state that kept its borders closed throughout January and avoided a major outbreak of COVID-19, clearly had the lowest inflation expectations of just 4.6% in January.

Long-term trend of the inflation expectations index – Expected annual inflation over the next 2 years

Source: Single Source Roy Morgan: Interviews an average of 4,600 Australians aged 14+ per month (April 2010 to January 2022).

See below for a full list of RBA interest rate changes during the period shown above.

Michele Levine, CEO of Roy Morgan, said inflation expectations rose 0.1% to 4.9% in January, returning to the seven-year high reached in November 2021 as the Omicron strain wreaked havoc in the Australian economy throughout the month:

“Inflation expectations were 4.9% in January 2022, the ‘hottest’ start to the year for the measure in eight years since January 2014 (5.1%). Inflation expectations rose by 0.1% compared to December 2021 and are now up 1.3% compared to a year ago in January 2021 (3.6%).

“The level of inflation expectations is expected to rise this year as inflationary pressures already evident overseas as the ‘highly stimulated’ global economy continues to recover from the COVID-19 pandemic are expected to put pressure on the rise in Australia’s inflation rate.

“The prospect of rising inflation in Australia raises the possibility of interest rate hikes to counter higher inflation. However, the RBA has said it has no plans to raise rates interest as long as wage growth in Australia is not “permanently above an annual rate of 3%”.

“The latest ABS wage growth data shows annual wage growth of just 2.2%. The RBA has said it does not expect annual wage growth to be sustainably above 3% until the end of 2023 – well after overseas interest rates are expected to start rising.

“Before that, we have an Australian federal election scheduled for the next few months. Interestingly, there is little difference between the inflation expectations of ALP supporters (4.8%) and L-NP supporters (4.6%) – however, there is a large divergence for supporters of other parties.

“Green supporters, who tend to be strongest in inner-city areas of Melbourne and Sydney, have inflation expectations of just 4.2% in January 2022, an increase of just 1% compared to the June 2020 low point. In contrast, supporters of other smaller parties and independents clearly have the highest inflation expectations of 5.8% – an increase of 1.5% from the low point.

“This wide divergence highlights the very different constituencies these voters represent compared to the inner city Greens. Supporters of these smaller parties tend to live in outer suburbs and rural areas and are very strong in Queensland – Australia’s most regional state and home to Pauline Hanson’s One Nation of the United Australia Party ( UAP) of Clive Palmer and Katter’s Australian Party (KAP).

“While these parties are unlikely to win many seats in Parliament, they had the support of around 15% of voters in the 2019 federal election. These voters represent a significant voting bloc for Prime Minister Scott Morrison. and Opposition Leader Anthony Albanese to keep in mind as they campaign ahead of elections due in mid-May.


Data for the Inflation Expectations series is drawn from single source Roy Morgan who surveyed an average of 4,600 Australians aged 14 and over per month over the past decade from April 2010 to January 2022 and includes interviews with 6 068 Australians aged 14 and over in January 2022. .

Questions used to calculate the monthly Roy Morgan Inflation Expectations Index.

1) Rates: “Over the next 2 years, do you think prices in general will go up, or down, or stay where they are now?”

2a) If you stay where you are now: “Do you mean that prices will rise at the same rate as now Where that prices in general will not increase in the next 2 years?

2b) If going up or down: “By what percentage approximately per year do you expect prices of (go up go down) on average over the next 2 years? »

3) “Would that be (x%) per year, or is that the total price over the next 2 years?”

The Roy Morgan Inflation Expectations Index is a forward-looking indicator unlike the Consumer Price Index (CPI) and is based on continuous (weekly) measurement and monthly reports. The Roy Morgan Inflation Expectations Index is up-to-date and relevant.

Monthly Roy Morgan Inflation Expectations Index (2010 – 2022)

Year

Jan

Feb

Mar

Apr

May

June

Jul

August

Sep

Oct

Nov

Dec

Annual

Average

2010

n / A

n / A

n / A

5.9

5.8

5.5

5.6

5.4

5.5

5.8

5.6

5.8

5.7

2011

6.6

6.4

6.4

6.2

6.1

6.2

6.1

5.8

5.7

5.8

5.5

5.5

6.0

2012

5.4

5.5

5.9

5.9

6.0

6.2

5.9

5.9

5.8

5.7

5.6

5.4

5.8

2013

5.2

5.1

5.3

4.9

5.2

4.9

5.3

5.0

4.8

4.9

4.8

5.0

5.0

2014

5.1

5.2

5.2

5.1

5.1

5.3

5.0

4.8

5.0

4.8

4.9

4.4

5.0

2015

4.4

4.3

4.5

4.5

4.2

4.4

4.4

4.5

4.5

4.2

4.4

4.5

4.5

2016

4.3

4.2

4.2

4.2

4.0

4.0

4.1

3.9

4.1

4.1

3.9

4.2

4.1

2017

4.5

4.4

4.4

4.4

4.3

4.2

4.3

4.5

4.4

4.5

4.5

4.5

4.4

2018

4.5

4.4

4.3

4.5

4.3

4.5

4.3

4.3

4.3

4.5

4.3

4.2

4.4

2019

4.2

4.0

4.0

3.7

4.1

3.8

4.1

3.9

4.0

4.1

3.9

4.0

4.0

2020

3.9

4.0

4.0

3.6

3.3

3.2

3.4

3.2

3.3

3.5

3.4

3.6

3.5

2021

3.6

3.7

3.8

3.7

3.7

4.0

4.1

4.3

4.5

4.8

4.9

4.8

4.2

2022

4.9

4.9

Monthly
Average

4.7

4.8

4.7

4.7

4.7

4.7

4.7

4.6

4.7

4.7

4.6

4.7

4.7

Roy Morgan’s overall average inflation expectation: 4.7

RBA interest rates move over the measured period: 2010-2020.

RBA – Cycle of rising interest rates (2010):

2010
April 2010: +0.25% to 4.25%; May 2010: +0.25% to 4.75%, November 2010: +0.25% to 5%.

RBA – Cycle of lower interest rates (2011-2013, 2015-2016 & 2019-2020):

2011
November 2011: -0.25% to 4.5%; December 2011: -0.25% to 4.25%.

2012
May 2012: -0.5% to 3.75%; June 2012: -0.25% to 3.5%; October 2012: -0.25% to 3.25%;
December 2012: -0.25% to 3%.

2013
May 2013: -0.25% to 2.75%; August 2013: -0.25% to 2.5%.

2014
There were no changes to RBA interest rates in 2014.

2015
February 2015: -0.25% to 2.25%; May 2015: -0.25% to 2%.

2016
May 2016: -0.25% to 1.75%; August 2016: -0.25% to 1.5%.

2017
There were no changes to RBA interest rates in 2017.

2018
There were no changes to RBA interest rates in 2018.

2019
June 2019: -0.25% to 1.25%; July 2019: -0.25% to 1%; October 2019: -0.25% to 0.75%.

2020
March 4, 2020: -0.25% to 0.5%, March 20, 2020: -0.25% to 0.25% and November 6, 2020: -0.15% to 0.10%.

For comments or more information, please contact:
Roy Morgan – Information

Office: +61 (03) 9224 5309
[email protected]

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