Confidence slumps after flood disaster
The mood of consumers has darkened significantly following the Queensland floods amid fears that the natural disaster will push up prices and slow the economy.
According to the Melbourne Institute Survey of Consumer Inflationary Expectations, inflation expectations jumped to 4.6 per cent in January, following a decrease of 2.8 per cent in December.
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Melbourne Institute research fellow Dr. Michael Chua, said this month’s survey picked up an overwhelming concern with price hikes.
“The impact of the flood is likely to reduce economic growth this quarter; this should reduce the probability of the RBA raising the cash rate,” Mr Chua said.
