Consumer confidence dropped slightly last week but its “holding pattern” could be disrupted by the Reserve Bank’s decision on interest rates.
The ANZ-Roy Morgan Australian Consumer Confidence index remains above average despite a drop of 0.3 per cent from the previous week, with the dip linked to a lack of local economic news in the build up to the federal election.
“It seems consumer sentiment is in a holding pattern for now,” ANZ head of Australian economics David Plank said on Tuesday.
“This pattern is likely to be disrupted on Tuesday afternoon, with the RBA expected to either cut the cash rate for the first time since August 2016 or clearly signal that a rate cut is on the cards.”
Confidence about current finances compared to a year ago was up 0.2 per cent while confidence about their financial situation next year fell 1.2 per cent.
Confidence about the economic conditions over the next year was up 4.0 per cent, although, for the next five years confidence was down 3.6 per cent.
The ‘time to buy a household item’ fell 0.3 per cent, compared to a rise of 4.0 per cent last week. Inflation expectations for the two years ahead fell by 4.0 per cent.