By James Glynn
SYDNEY–Australian consumer confidence dimmed further last week with consumers bracing for further interest-rate increases and cost-of-living gains, especially in the area of energy prices.
Consumer confidence decreased by 0.8 point over the week, keeping it around its lowest levels for 30 years, according to a survey by ANZ Bank and pollster Roy Morgan.
The Reserve Bank of Australia is expected to deliver a further broadside to household budgets in coming hours with a further rise in the official cash rate that takes the cumulative increase since May last year to 425 basis points.
News of an interest-rate increase would hit at the same time as big electricity-price hikes impact across the country, setting the scene for even lower confidence readings throughout July.
Those paying off their own homes continue to have the lowest confidence, 6 points below the average for all survey participants.
ANZ Senior Economist Adelaide Timbrell said the four-week average level of confidence was the second-worst result in the last 30 years, after the first four weeks of the Covid-19 pandemic.
Worryingly, the survey showed the four-week average for inflation expectations nudged higher from 5.6% to 5.7%, its highest level this year, while sentiment around current financial conditions declined 1.8 points after a 6.8-point jump the week prior.
The mood about future financial conditions rose 0.7 point over the week but remained below 90 for a fifth straight week, the survey showed. Current economic conditions increased slightly by 0.3 point while future economic conditions fell 5.4 points.
Consumers were a little more upbeat on the question of buying a major household item, which rose 2 points.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,504 interviews conducted online and over the telephone during the week to Sunday.
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