Mortgage-holder confidence at record low
- Consumer confidence fell 3.1pts last week to 63.1pts. The four-week moving average dropped 1.2pts to 66.2pts.
- ‘Weekly inflation expectations’ ticked down 0.2ppt to 5.9%, while the four-week moving average eased 0.1ppt to 6.1%.
- ‘Current financial conditions’ (over the last year) decreased 6.8pts, and ‘future financial conditions’ (next 12 months) declined 6.3pts.
- ‘Short-term economic confidence’ (next 12 months) was down 2.4pts, while ‘mediumterm economic confidence’ (next five years) eased 0.4pts.
- The ‘time to buy a major household item’ subindex ticked up 0.1pts.
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The weekly ANZ-Roy Morgan Australian Consumer Confidence rating is based on 1,019 interviews conducted online and over the telephone during the week to Sunday. *Not seasonally adjusted.
ANZ Economist, Sophia Angala, commented:
Last week’s RBA rate hike to 4.85%, the highest cash rate since 2008, likely weighed on ANZ-Roy Morgan Australian Consumer Confidence. The series fell to 63.1pts, its thirdlowest result since the series began in 1973, driven by weaker confidence in personal financial conditions. Confidence fell across all housing cohorts, with mortgage holder confidence falling to its lowest level since the weekly series began in 2008.
We think the cash rate has likely peaked at 4.85%, although the risks remain tilted towards further tightening given the RBA’s concern about inflation expectations. On a four-week moving average basis, inflation expectations ticked down last week but remain elevated compared with the beginning of the year. Together, elevated rates and historically weak confidence are likely to weigh on household spending.
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