Australia consumer confidence slumps 4.7% to 80.4 after RBA rate hike

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Summary · why it matters

Westpac Banking Corp reported that Australia's consumer confidence index fell 4.7% in October to 80.4, after the Reserve Bank of Australia raised interest rates and as pressure from higher oil prices weighed, leaving households worried about the outlook for the job market and the cost of living. A reading below 100 indicates that negative views still outnumber positive ones. Among the 40% of respondents surveyed after the RBA announced its rate decision, the sub-index dropped to 67.2, a strikingly weak level. Matthew Hassan, Westpac's head of Australian macro forecasting, said Australian consumers remain trapped in a cost-of-living nightmare that seems to have no end, and at just above 80, the latest confidence reading is one of the 40 worst since the monthly survey began in the early 1970s. The RBA raised its policy rate last week to a 15-year high of 4.6%, its fourth hike this year, adding to household pain through higher borrowing costs and surging oil prices driven by the protracted conflict in the Middle East.

Impact on assets 1

Others▲
％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

RBA hiked rates to a 15-year high of 4.6%, a policy tightening that lifts the global rate backdrop and pushes the Effective Federal Funds Rate yield higher.

Off-coverage companies 1

Westpac Banking Corporationi
Private▼ NegativeMonetaryrelevance

Westpac's own consumer confidence index slumped 4.7% to 80.4 after the RBA's rate hike, signaling weaker household activity and credit demand for the bank.