Last week, Australian consumer confidence hit its lowest point in four months following news of a further interest rate hike by the Reserve Bank of Australia (RBA). The official cash rate was raised by 25 basis points to 4.35%, with the RBA warning that inflation pressures are expected to be more persistent than previously anticipated.
According to a survey conducted by the ANZ Bank and pollster Roy Morgan, consumer confidence decreased by 3.5 points over the week. All measures of confidence recorded losses, with sentiment regarding current financial conditions down 1.9 points, while future financial conditions dropped 1.3 points.
The survey also revealed that confidence in the current economic conditions decreased by 1.7 points, while confidence in future economic conditions declined by 4.7 points.
In terms of purchasing behavior, consumers showed a notably pessimistic attitude towards buying major household items, with the subindex experiencing a significant drop of 7.6 points, outweighing a previous week's rise.
ANZ senior economist, Adelaide Timbrell, highlighted that the RBA's interest rate increase may have had a negative impact on some households, particularly those paying off their homes or who own their homes outright. This cohort often includes individuals with investor mortgage debt.
It remains to be seen how this dip in consumer confidence will impact the overall economy and future spending patterns.