The RBA will be watching inflation expectations ahead of their August 11 review. The latest survey keeps them uncomfortably high even if they have inched lower

This analysis from from Roy Morgan, here.

The weekly ANZ-Roy Morgan Inflation Expectations declined slightly in the month of June but have stabilised so far during July as the situation in the Middle East has deteriorated and are at 5.9% for the week of July 20-26, 2026, down 0.1% points from the month of June.

The latest weekly reading is 0.3% points below the average for Inflation Expectations over the last 22 weeks since the Iran War began on February 28, 2026, of 6.2%. A look at monthly Inflation Expectations for June 2026 shows the measure at 6% for the month – down 0.3% points from the prior month of May.

Inflation Expectations spiked to a record monthly high of 7% for April 2026 following the United States and Israel attack on Iran but then dropped significantly. However, the recent renewal of fighting has sent Inflation Expectations back up for three straight weeks since early July. In addition, the latest information on weekly Inflation Expectations is available to view each week in the Roy Morgan Weekly Update video on YouTube.

Monthly Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years

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Source: Roy Morgan Single Source: Interviewing an average of 4,900 Australians aged 14+ per month (April 2010 – June 2026).

Average retail petrol prices were under $1.60 per litre in June for the first time since January 2022

Average retail petrol prices hit a four-and-a-half year low of $1.597 per litre in late June, the lowest average retail price since early January 2022 ($1.59 per litre). This was down 93.7 cents (-37%) since the record high of $2.534 reached in late March 2026. In fact, average retail petrol prices were below $1.70 per litre for five straight weeks from early June until mid-July.

At the end of June, the Albanese Government halved the fuel excise cut introduced in early April but extended the other half of the cut until early August when it is also due to end. Since the excise cut was rolled back, average retail petrol prices have increased from $1.60 per litre (June 22-28, 2026), to $1.82 per litre (July 20-26, 2026) – an increase of 22 cents per litre (+14.2%).

Australian average retail petrol prices (cents per litre) weekly: 2021 – 2026

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Source: Australian Institute of Petroleum (AIP) weekly reports: https://www.aip.com.au/pricing/weekly-prices-reports.

The latest official ABS quarterly annual CPI estimate at 4% for the year to May 2026 is still significantly above the Reserve Bank’s preferred target range of 2-3% over the course of the economic cycle, despite dropping by 0.6% points since March 2026. Despite this fall, official estimates of inflation have more than doubled since June 2025 (1.9%).

The increase in official estimates of inflation led to the Reserve Bank’s decision to commence a cycle of increases by raising interest rates at its first three meetings of 2026 in February (+0.25%), March (+0.25%), and May (+0.25% to 4.35%), but left interest rates unchanged at their most recent meeting in mid-June.

The next ABS Monthly CPI estimate for June 2026 is due to be released on Wednesday.

Inflation Expectations were highest in the smaller States of Tasmania and South Australia

A look at Monthly Inflation Expectations on a State-based level for June shows decreases in four States as Inflation Expectations eased after peaking during March, April, and May.

The two exceptions were the two smallest States of Tasmania, for which Inflation Expectations were unchanged at 6.8%, and South Australia, for which Inflation Expectations increased 0.5% points to 6.7%.

The largest monthly declines for Inflation Expectations were the resource heavy States of Queensland, down 0.7% points to 6.3%, and in Western Australia, down 0.7% points to 5.9%.

Interestingly, Inflation Expectations were lowest in New South Wales, down 0.1% points to 5.9% (and down a large 1% point from two months ago), and in Victoria they were lowest of all at ‘only’ 5.6%, down 0.5% points on a month ago (and down 1.2% points from two months ago).

Inflation Expectations in Country Areas plummeted 0.8% points to 6.2% in June, and in Capital Cities dropped by 0.2% points to 5.8%.