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Consumer confidence: slumped after cash rate hike

Consumer confidence decreased 3.5pts, but the four-week moving average decreased 0.5pts.


Among the mainland states, confidence rose only in WA, while it fell in NSW, Victoria, Queensland, and SA.


‘Weekly inflation expectations’ was unchanged at 5.5 per cent, while the four-week moving average increased from 5.4 per cent to 5.5 per cent.


All the confidence subindices registered losses. ‘Current financial conditions’ fell 1.9pts, while ‘future financial conditions’ were down 1.3pts.


‘Current economic conditions’ decreased 1.7pts, while ‘future economic conditions’ dropped 4.7pts.


The ‘time to buy a major household item’ subindex plunged 7.6pts after a 6pts jump the week before.


ANZ Senior Economist Adelaide Timbrell said: “The ANZ-Roy Morgan Australian Consumer Confidence index decreased last week to its lowest level in four months following the cash rate hike to 4.35%by the RBA. But confidence about future economic conditions –the outlook for the economy over the next five years –fell to its lowest level since April 2020. This suggests that the RBA hike may have been a negative economic signal for some households.


The fall in confidence was driven by those most exposed to the rate hike, those paying off their homes and those who own their homes outright (a cohort including many who have investor mortgage debt). Continued elevated inflation is also keeping confidence low across all cohorts.”


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