The February interest rate hike has had a negative impact on consumer confidence, as evidenced by weekly and monthly surveys. The Westpac and Melbourne Institute monthly consumer sentiment survey saw a 6.9 percent drop, with the score of 78.5 being close to the April 2020 low of 75.6 during the pandemic. ANZ and Roy Morgan’s weekly consumer confidence index also suffered a 5.5 point decrease to 78.1, its lowest level since April 2020. However, NAB’s business survey returned an increase in confidence and conditions, with confidence rising to +6 index points and capacity utilisation reaching 85.7 percent—close to the mid-2022 record high. NAB chief economist Alan Oster said the survey indicated the economy was still resilient despite challenges. Treasurer Jim Chalmers said inflation was the main economic challenge of 2023, and the government had a three-point plan to address it. Deputy opposition leader Sussan Ley argued that the government’s off-budget spending of $45 billion would lead to higher inflation and interest rates for those already struggling with their mortgages.
Consumers worry about increasing interest rates.
