16 Feb 2016

Inflation expectations fall

7:40 pm on 16 February 2016

Expectations of where inflation will be in the next couple of years have fallen, adding weight to calls for the Reserve Bank to cut interest rates further.

The central bank's quarterly survey of expectations shows firms expect inflation will be 1.63 percent in two years' time, down from 1.85 percent in the previous period.

The measure is closely watched as a gauge of inflation pressures.

Some economists argue the Reserve Bank will have to cut the official cash rate from its current 2.5 percent, perhaps as early as June.

But others say it will take further falls to convince the bank to act.

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