Australia inflation expectations hold at 15yr high

SYDNEY, July 10 (Reuters) - Australian consumer inflation expectations stayed at 15-year highs in July, a survey showed on Thursday, underlining the danger that such lofty expectations could in turn fuel price and wage pressures.

The Melbourne Institute's consumer inflationary expectations survey found the median expectation of price increases in the coming year held at 5.9 percent in July, due to persistent pricing pressure in fuel, rent and food.

That was well above the Reserve Bank of Australia's (RBA) 2 to 3 percent target band for inflation and above the latest reading of consumer price inflation of 4.2 percent.

The survey found that just 7.5 percent of respondents believed that inflation would come back down to within the RBA's target band in the coming year, off from an already slim 8 percent in June.

The central bank has warned that it might have to raise interest rates again should expectations of high inflation feed through to wage and price behaviour.

The RBA has already raised rates twice this year, taking them to a 12-year high of 7.25 percent, as it battled surging living costs. (Reporting by Wayne Cole; Editing by Jonathan Standing)