Australian Consumers Downbeat After Surprise Rate Hike

By James Glynn

SYDNEY–Australian consumer confidence was rattled last week by a surprise rise in official interest rates, the 11th in the last year, with the Reserve Bank of Australia warning more may be needed.
Consumer confidence decreased by 2.1 points last week, while inflation expectations nudged higher, according to a survey by ANZ Bank and pollster Roy Morgan.

ANZ senior economist Adelaide Timbrell said the rise in the official cash rate to 3.85% from 3.60% likely damped the mood of consumers.
Confidence remained below 80 for a 10th straight week, the longest stretch below 80 since the 1990-91 recession when the survey was conducted monthly, and it was below 80 for five consecutive months, she added.
Confidence declined among all housing cohorts and fell the most for those paying off their homes.
Confidence around current financial conditions dropped 4.0 points to its second lowest level since 2001. Future financial conditions gained 0.3 points, the survey showed.
Consumers were more downbeat on the question of buying a major household item, with the measure declining 2.7 points, with the result remaining below 70 for a 13th consecutive week, according to the data.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,501 interviews conducted online and over the telephone during the week to Sunday.
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