Hopes of break from Australian cost-of-living duress, rate hikes dash

16 Feb '23

1 min read

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Westpac-Melbourne Institute consumer sentiment index fell by 6.9 per cent from 84.3 in January to 78.5 in February and hopes of a break from cost-of-living pressures and rate hikes in Australia dashed. Sentiments are back at historic lows, with confidence around jobs, which was positive till recently, starting to get rattled again, Westpac, Australia’s first bank, said.

After a modest rally through the Christmas-New Year period, consumer confidence has fallen sharply to be back near the historic lows seen last November. Cost of living pressures and interest rate rises continue to weigh heavily, Westpac noted in a release.

Hopes of some easing in both have been dashed by the strong December quarter consumer price index and the Reserve Bank of Australia’s resumption of its interest rate tightening cycle.

The latest sentiment decline follows Australian Bureau of Statistics figures released late last month showing consumer price inflation surged from 7.3 per cent in September to 7.8 per cent in December, taking Australia’s inflation to a 32-year high and putting it on a par with the very high rates seen in major developed countries abroad.

Interest rates were also a clear factor weighing on confidence in the month.

ALCHEMPro News Desk (DS)

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