Consumer confidence has taken a hit from higher-than-expected inflation data that stoked speculation of a Melbourne Cup day interest rate hike.
The index assembled by ANZ and Roy Morgan every week fell 3.2 points last week, sinking to 75 index points.
The gauge has been tracking at weak levels as the elevated cost of living and high interest rates keep household budgets under pressure.
The further decline follows an uncomfortably high inflation print and expectations of a November interest rate hike by the Reserve Bank of Australia, ANZ senior economist Adelaide Timbrell said.
“The indices that capture confidence in ‘current’ conditions declined the most, including current finances, the short-term economic outlook and whether it is a good ‘time to buy a household item’,” she said.
Consumers were feeling less confident about their current financial conditions, with the measure down 4.6 points.
The RBA has been trying to bring inflation back to its two-three per cent target range by lifting interest rates, though has been nearing the end of the tightening cycle.
For the past four meetings, the board has left the cash rate steady at 4.1 per cent.
But quarterly inflation data came in above expectations last week, particularly the underlying measures, prompting several economists to revise their forecasts in favour of another interest rate hike.
Consumer prices as tracked by the Australian Bureau of Statistics lifted 1.2 per cent over the three months to September and 5.4 per cent annually.
– AAP
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