25 May 2011

Companies expect inflation rate rise

8:48 am on 25 May 2011

The Reserve Bank's latest survey has found a jump in inflation expectations.

The bank's quarterly survey of expectations showed business managers forecast annual inflation to average 3.12% over the coming year compared with a figure of 2.87% in the previous survey in February.

Two-year inflation expectations, which the Reserve Bank pays particular attention to, rose more markedly; from 2.64% to 3%.

The survey also shows expectations for economic growth in the coming year have fallen from 2.5% to 2.1%.

Over the next two years, growth expectations rose from 2.6% to 2.8%.