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Inflation remains the biggest economic concern for Australians in CY26, outranking housing affordability, interest rates, and where wages are at, according to a major new Reserve Bank survey that polled 9,000 people.
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The findings suggest cost of living pressures dominate public sentiment, despite housing affordability remaining a major issue across the country.
Around two-thirds of respondents ranked inflation among their top three economic concerns, making it the most common across every demographic group, regardless of age, gender, income or housing status.
Housing affordability ranked second, with almost 40% of respondents identifying it as one of their biggest worries, well behind inflation. The survey found Australians worried about inflation were significantly more likely to expect the economy and their own household finances to deteriorate over the next year.
Employment, wages, government spending, and climate change all ranked well behind inflation and housing as standout economic concerns.
The survey also highlighted a sizeable gap in economic literacy, particularly around policy. While about half of respondents correctly understood higher interest rates slow economic activity and employment, only around one-quarter correctly identified higher interest rates are designed to reduce inflation over time.
More than half of respondents instead believed higher rates would increase inflation, suggesting many Australians associate rising borrowing costs with higher prices rather than lower demand across the economy.
The RBA said improving public understanding of monetary policy is important because well-anchored inflation expectations can make it easier for inflation to return to target without requiring larger interest rate moves.
The latest findings were collected before renewed geopolitical tensions in the Middle East and subsequent increases in fuel prices, meaning inflation concerns may have shifted further since the survey was completed.
For investors, the survey offers another reminder that inflation expectations remain firmly embedded in the community, reinforcing why inflation data will continue to be closely watched as markets assess the outlook for future RBA rate decisions — which we also covered with The Kouk this week.
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