Consumer confidence data hits three-year high ahead of rates decision
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The news: Consumer confidence has reached a three-year peak as anticipation that the Reserve Bank of Australia will cut interest rates next Tuesday grew following the release of consumer price index data that represented a decline in underlying inflation.
The numbers: The weekly ANZ-Roy Morgan Australian Consumer Confidence index increased by 3.9 points to 90.6 in the week ending 3 August, the first time it has exceeded 90 since May 2022. The four-week moving average lifted 0.5 points to 87.5.
All the subindices gained — the current financial conditions subindex lifted 6.8 points while future financial conditions lifted 7.9 points. The ‘time to buy a major household item’ subindex lifted 2.2 points.
Weekly inflation expectations increased 0.3 points to 5.2%, while the four week moving average gained 0.1 points to 4.9%.
The context: ANZ economist Sophia Angala said confidence in future household finances rose sharply after the release of CPI data last week “showed an easing in underlying inflation and raised the likelihood of an RBA cut in August".
Angala also flagged that the US President Donald Trump’s confirmation of his global tariff regime “may have driven” the increase in weekly inflation expectations, despite the data suggesting “a sustainable return of inflation to the midpoint of the RBA’s 2-3% target band.
The RBA will make its next interest rate decision on 12 August.
The source: ANZ-Roy Morgan Consumer Confidence
