(Bloomberg) -- Australian consumer sentiment dropped last week to the lowest level since August 2020 as inflation expectations advanced further and households’ concern about their finances deepened.
The weekly gauge of confidence tumbled 4.1% to 87 in the period May 30-June 5, indicating pessimists far outweigh optimists, Australia and New Zealand Banking Group Ltd. said in a statement Tuesday. All five sub-indices registered losses, while weekly inflation expectations accelerated to 5.7%.
The result comes just hours before the Reserve Bank is expected to execute its first back-to-back interest-rate increase in 12 years. Sentiment has been weakening in recent times amid fears that higher mortgage repayments will further squeeze Australia’s heavily indebted households, already under pressure from rapid inflation and still-tepid wages growth.
Ahead of today’s RBA meeting, Treasurer Jim Chalmers warned of significant financial stress for households.
“We are in the midst of a full-blown cost of living crisis and electricity prices and gas prices are unfortunately part of that pain,” he told Channel 7.
“Our job, as the government, is to make sure that after some of this near-term cost of living relief runs out, that it is replaced by responsible, long-term, sustainable cost of living relief.”
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