The Westpac-Melbourne Institute Consumer Confidence Index fell 0.9% in October to 83.7, following yet another RBA cash rate increase, albeit by a lower-than-anticipated 25 basis points.
Westpac Chief Economist Bill Evans said the October result could have been worse if the Reserve Bank had lifted the cash rate by 50 basis points instead.
“Sentiment amongst those sampled before the RBA decision showed a depressing 77.4 index read, down 8.3% from the print in September,” Mr Evans said.
“Sentiment was considerably better amongst those surveyed after the RBA’s smaller than expected move, with an index read of 88.7, up 14.6%.
“Clearly, respondents were extremely concerned heading into another prospective 50 basis point increase in the cash rate.”
Mr Evans said the post-RBA ‘relief rebound’ experienced in the October survey is unlikely to be repeated in future months.
“While each step from here may not be as large, the higher starting point for rates means the pressure on household finances will become more intense,” he said.
The survey of 1,200 Aussies revealed 54% expect rates to continue to increase by one percentage point or or more over the next year, which would take the cash rate to more than 3.60%.
This result has continued to hamper the index ‘economic conditions over the next 12 months’ with a 4.2% fall in October to 79.7.
Further, Aussies continue to press pause on their search for a new home with the ‘time to buy a dwelling’ index falling by 6.4% to 75.3 - 43% below its peak in November 2020.
Instead Aussies may be more willing to buy household items they have previously held out on purchasing, with the ‘time to buy a household item’ index lifting 1.4% from September.
Mr Evans noted the Reserve Bank Board next meets on 1 November, with another 25 basis point increase to the cash rate likely.
“This time markets and the media will be anticipating the decision and there will be no ‘surprise factor’ to support confidence,” he said.
“Instead, what may become clearer is that the tightening cycle still has significantly further to run. That is likely to keep the Consumer Sentiment Index firmly in deeply pessimistic territory in coming months.”
Advertisement
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.
Provider | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
4 | 0 | 0 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
FEATURED | High Interest Savings Account (< $250k)
| ||||||||||||
High Interest Savings Account (< $250k)
| |||||||||||||
0 | 1000 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
FEATURED | Savings Maximiser (<$100k)
| ||||||||||||
Savings Maximiser (<$100k)
| |||||||||||||
4 | 0 | 0 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Savings Account (Amounts < $250k)
| |||||||||||||
Savings Account (Amounts < $250k)
| |||||||||||||
0 | 2000 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Home Saver
| |||||||||||||
Home Saver
| |||||||||||||
0 | 200 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
No monthly fees | Save Account
| ||||||||||||
Save Account
| |||||||||||||
0 | 2000 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
HomeME Savings Account ($0 - $100,000) | |||||||||||||
0 | 200 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Growth Saver ($1 - $25k) | |||||||||||||
0 | 1000 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Target Saver | |||||||||||||
0 | 1000 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
For customers aged 14-35 years | |||||||||||||
Future Saver Account ( < $50k) | |||||||||||||
0 | 500 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Goal Saver
| |||||||||||||
Goal Saver
| |||||||||||||
0 | 1000 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Boost Saver | |||||||||||||
0 | 0.01 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Reward Saver Account (31 years +) ($0-$100k) | |||||||||||||
0 | 100 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Bonus Saver Account (Amounts < $100k) | |||||||||||||
0 | 20 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Reward Saver Kick Start (Amounts ≤ $1m) | |||||||||||||
0 | 0.01 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Life (< 30 years) (Monthly deposit) | |||||||||||||
5 | 0 | 0 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
NetBank Saver | |||||||||||||
0 | 0 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
ANZ Save | |||||||||||||
0 | 5 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Young Saver Account | |||||||||||||
0 | 50 | 1 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Save up | |||||||||||||
0 | 200 | 0 | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | More details | |||||||
Bonus Saver (<$1 Million) |
Photo by Andrew Neel on Pexels