SYDNEY — Australian consumer confidence posted a fifth straight fall last week as inflation expectations rose to their highest level in more than 10 years.
Consumer confidence decreased 1.5% last week as concerns about the soaring cost of living eroded sentiment, according to a survey by ANZ and pollster Roy Morgan.
Weekly inflation expectations jumped 0.5 percentage points to 6.6%, the highest weekly value in over a decade, the survey showed.
The rise in inflation expectations follows news last week of higher-than-expected inflation in the third quarter, which prompted some economists to forecast that the Reserve Bank of Australia will need to reaccelerate the pace at which it is raising interest rates.
ANZ’s head of Australian economics, David Plank, said inflation expectations have jumped to their highest since 2011 after consumer prices rose at their fastest pace since 1990 in the third quarter.
The share of people who think they are financially worse off than the same time last year rose to 47%, the highest value for this indicator in more than three decades, Plank added.
“Cost-of-living concerns, along with expectations of more rate hikes by the RBA, have caused confidence to decline to levels last seen during the early weeks of the Covid-19 lockdowns,” he said.
Confidence among people still paying off their mortgages has fallen 15.6% over the last six weeks, with the fall having some impact on spending, Plank said.
Sentiment toward current financial conditions fell 2.9% last week, dropping to its lowest point since the early stages of the pandemic. Future financial conditions fell 4.2%, dropping 11.4% over the past three weeks, the survey showed.
Confidence toward current economic conditions was down 4.3% last week, while future economic conditions rose slightly by 0.7%.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,488 interviews conducted online and over the telephone during the week to Sunday.