Powered by MOMENTUM MEDIA
subscribe to our newsletter

Falling consumer confidence points to May rate cut

Westpac has reported a decrease in consumer confidence, which the bank describes as “a disappointing result”.

Consumer sentiment fell from 99.5 in March to 96.2 in April, and is still less than 99.7 recorded 12 months ago, according to a Westpac and Melbourne Institute index.

“We would have preferred to have seen some upward momentum in the index going into the important Commonwealth Budget that will be released next month,” chief economist Bill Evans said.

“Indeed, recognition that the next Budget is imminent may have contributed to this month’s weakening in confidence.”

However, Mr Evans said there were other factors behind this result, one of them being the rise in petrol prices since February.

Advertisement
Advertisement

“In November, pump prices averaged $1.32 per litre. They fell to $1.10 by February but have increased to $1.34 by April,” he said.

“Recall that we partly attributed the eight per cent jump in the confidence index in February to the sharp fall in petrol prices.”

According to Mr Evans, markets gave a probability of around 75 per cent to the Reserve Bank cutting the cash rate in April.

He said that failure to deliver on expectations, including widespread media speculation, would also have hindered confidence.

“High-profile coverage of the sharp fall in the iron ore price would also have been significant,” Mr Evans said.

PROMOTED CONTENT


“The 21-per-cent fall in the price of Australia’s premier export commodity since the start of the year would have undermined households’ confidence.”

Mr Evans added that the drop in consumer confidence supports the cause for a further rate cut.

“We are extremely confident that the bank will finally deliver the much-anticipated second cut of 25 basis points on 5 May,” he said.

Falling consumer confidence points to May rate cut
mortgagebusiness

Latest News

The number of dwellings approved plunged in January but still remained well above last year’s level, according to ABS data. ...

Australians aged 22 and under (Gen Z) are the age group that is most interested in owning a home in future, even though two-fifths believe...

Teachers Mutual Bank Ltd has welcomed new directors to its board and bid farewell to John Kouimanos, who has retired from the board after...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Aggregation group changes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.