Australia consumer mood undermined by rate risk, inflation

  div classBodysc17zpet90 cdBBJodivpSYDNEY Reuters – A measure of Australian consumer sentiment slipped for a fifth straight month in April as rising inflation and the risk of higher interest rates weighed on family finances and spending intentions.p

  pThe WestpacMelbourne Institute index of consumer sentiment released on Wednesday dipped 0.9 in April from March, when it slid 4.2. The index was down 19.6 from April last year at 95.8, and almost back to where it was prepandemic.pdivdivdiv classBodysc17zpet90 cdBBJodiv

  pThe survey suggested the governments Budget in March had a limited impact on the national mood, even though it contained preelection tax breaks and cuts to fuel excise.p

  pWidespread flooding across the east coast also had some effect on sentiment.p

  p“There is further evidence that interest rates, inflation and weather continued to unnerve consumers in the current survey,” said Westpac chief economist Bill Evans.p

  pHe noted sentiment among people with a home loan fell a steep 9.2 in April amid speculation the Reserve Bank of Australia RBA could raise interest rates as early as June.p

  pSome 70.0 of respondents expected a rise in rates in the next 12 months, the highest level since August 2016 when the question was first included in the survey.p

  pThat, coupled with high prices for petrol, housing and food, saw the surveys measure of family finances compared with a year ago drop 4.8, while the outlook for finances over the next 12 months fell 0.9.p

  pLikewise, the surveys measure of whether it was a good time to buy a major household item sank 5.3, and is down 20 on a year ago.p

  pThere was some improvement in the surveys measure of the economic outlook for the next 12 months which bounced 5.8 after a sharp fall in March, while the outlook for the next five years edged up 1.0.p


  pp Reporting by Wayne Cole Editing by Shri Navaratnamp

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