Australian consumer confidence has fallen as inflation expectations rise | So Good News

Weekly inflation expectations jumped 0.5 percentage points to 6.6%, the highest weekly rate in a decade, the survey showed.

The rise in inflation expectations follows news last week of higher-than-expected inflation in the third quarter, prompting economists to say the Reserve Bank of Australia may need to accelerate the pace of rate hikes.

ANZ’s chief economist in Australia, David Plank, said inflation expectations had risen to the highest level since 2011 and consumer prices were rising at the fastest rate since 1990 in the third quarter.

The share of people who think they have financial problems than the same time last year rose to 47%, the highest value of this indicator in more than three decades, Plank added.

“Concerns about the rising cost of living, as well as expectations of further inflation by the RBA, have caused confidence to drop to levels seen at the start of the Covid-19 lockdown,” he said.

Confidence among people still paying off their mortgages has fallen 15.6% in the past six weeks, and the fall is also affecting money, Plank said.

Confidence in the current economy fell by 2.9% last week, the lowest since the start of the pandemic. Financial futures fell 4.2%, down 11.4% in the past three weeks, the survey showed.

Confidence in current economic conditions was down 4.3% last week, while economic futures rose slightly by 0.7%.

ANZ-Roy Morgan’s weekly Australian Consumer Confidence Index is based on 1,488 online and telephone interviews during the week to Sunday.