By James Glynn
SYDNEY – Australian consumer confidence saw a boost last week, fueling speculation that the Reserve Bank of Australia (RBA) may be nearing the end of its record-breaking increase in the official cash rate over the past year.
According to a survey, consumer confidence rose by 2.6% during the week, with renters being the primary drivers behind the recovery in sentiment.
ANZ senior economist Adelaide Timbrell noted that confidence among those who rent their property increased by 7.9 points, while it only slightly rose by 0.9 points for homeowners.
The RBA’s next policy meeting is scheduled for next week, with second-quarter inflation data due on Wednesday, which will play a crucial role in determining whether the central bank will add to the already significant burden of soaring mortgage interest rates.
Recent discussions in Canberra have heavily focused on the issue of rising rents and its impact on inflation. Some lawmakers have even proposed freezing rents for a certain period of time. It is widely believed that rising interest rates have been a catalyst for the surge in rents over the past year.
While the average confidence level reached its highest point since the first week of June, it has remained below the 80 mark for 21 weeks, just one week shy of the record set during the 1990-91 recession.
The survey also revealed a decline in weekly inflation expectations, with a 0.2 percentage point decrease to 5.4%. The four-week moving average fell from 5.7% to 5.6%.
Sentiment around current financial conditions, on the other hand, experienced a significant increase of 6.7 points, offsetting the 5.7-point fall from the previous week. Future financial conditions also rebounded strongly, surpassing 90 with a 4.9-point increase. Additionally, there was a 2.9-point increase in confidence regarding the current economic conditions.
Consumers also expressed more optimism about purchasing major household items, with a gain of 0.7 points over the week.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,472 interviews conducted both online and over the telephone throughout the week until Sunday.