Key facts
- Westpac's consumer sentiment index fell to a four-year low in November, the survey showed.
- Pessimism among mortgaged households was the worst in records dating back to 1994, the survey showed.
- Confidence in the economic outlook over the coming year was the weakest since August 2020.
- Nearly three in four respondents expected another rate hike over the coming 12 months, after five increases this year.
- ANZ data showed markets priced a more than 50% chance of an RBA cut by August 2027.
Consumer sentiment among Australian mortgaged households fell to its lowest level since records began in 1994, Westpac's November survey showed, as households reported a sense of helplessness about the economy.
Westpac's consumer sentiment index sank again in November to a four-year low, according to the survey. Matthew Hassan, Westpac's head of economic forecasting, said readings this weak had only been seen during the onset of the Covid pandemic, the height of the GFC and the recessions of the early 1990s and early 1980s. Confidence in the economic outlook over the coming year reached its weakest since August 2020.
Michele Bullock, the RBA governor, warned a week earlier that the year ahead would feel like a recession because of cost of living pressures and weak growth. After five rate increases this year, nearly three in four respondents said they expected another hike over the coming 12 months.
Financial markets have begun pricing the chance of lower rates from the middle of next year. ANZ data showed the implied probability of an RBA cut was more than 50% by August 2027, with a cut to 4.6% fully priced by December 2027. Brent crude fell 20% from a post-Iran war high of nearly $US118 a barrel at the end of October to below $US94.
Prime Minister Anthony Albanese played down tensions with Treasurer Jim Chalmers, saying "the treasurer is doing a great job," and said he was working closely with Chalmers ahead of next month's mid-year budget update, which will include spending cuts.