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Australian consumer sentiment falls after latest RBA rate hike
The Westpac–Melbourne Institute index dropped 4.7% to 80.4 in October, with household finances and big-item purchase timing weighing most.
Australian consumer sentiment deteriorated sharply in October, with the Westpac–Melbourne Institute Consumer Sentiment Index falling 4.7% from 84.4 to 80.4, according to Action Forex. The weakness was especially pronounced after the latest Reserve Bank of Australia rate hike.
Westpac said sentiment among respondents surveyed before the decision held at 86.9, slightly above September, but collapsed to 67.2 among the group surveyed after the rate move. The bank also noted the nearly 20% gap between the two samples was the largest since it began tracking daily responses in 2019.
The report said pressure was concentrated in household finances and spending appetite. The index measuring family finances compared with a year ago fell 8.0% from 72.6 to 66.9, while expectations for family finances over the next 12 months dropped 6.4% from 94.5 to 88.4.
Westpac attributed the deterioration mainly to higher fuel prices and higher interest rates, Action Forex reported. It cited national pump prices back above $2.30 per litre and a cash rate of 4.6%, alongside increased consumer concern about further rate increases and the labour-market outlook.