Aussies' confidence rocked by shock RBA call
Fresh figures released by ANZ-Roy Morgan shows consumer confidence slumped 2.1 points to 86.5 over the week since the RBA announced its decision on July 8.
Worse still, more than 44 per cent of Australians are now saying they feel worse than this time last year, up 2 per cent from last week.
ANZ economist Sophia Angala says the fall in confidence is likely due to the RBA shocking experts and markets by holding the cash rate at 3.85 per cent, instead of cutting it by a further 25 basis points as was widely expected. Consumer confidence fell on the RBA holding the cash rate. Credit: News Corp Australia, NewsWire/ Monique Harmer
'While the previous upward trend in consumer confidence is stalled for now, we expect a resumption of the improvement this year, as robust yearly growth in disposable incomes and further rate cuts flow through to households,' Ms Angala said.
Meanwhile, Westpac is reporting consumer confidence rose slightly for the month of July up 0.6 per cent to 93.1.
But Westpac consumer data shows Aussie mortgage holders felt worse following the RBA decision.
Those surveyed at the start of month gave a score of 95.6 while those asked after the RBA's call scored 92. Anything over 100 is considered optimistic.
Westpac head of Australian macro-forecasting Matthew Hassan said sentiment Australia's consumer sentiment recovery experienced another 'false start' in July.
'While the mood improved a touch for the month as a whole, responses over the survey week show a clear disappointment following the RBA's surprise move to leave rates on hold at its July meeting,' Mr Hassan says.
'This is the third time since late last year that events have conspired to undermine promising improvements in the consumer mood.' RBA governor Michele Bullock says the board wants to wait for quarterly inflation data. Christian Gilles / NewsWire Credit: News Corp Australia
The falling consumer sentiment follows homeowners being left frustrated with the RBA after a widely anticipated rate cut was not passed down by the central bank.
The RBA handed down its decision on Tuesday July 8 to hold interest rates, which some experts called a 'cruel blow' for households.
It is at odds with key economists and all four major banks who previously predicted a cut of 25 basis points.
Australia's cash rate remains at 3.85 per cent.
NED-9108-Monthly-Inflation-Indicator
bRight Agent co-founder Aaron Scott called the surprise hold a 'cruel blow' for millions of Australian homeowners.
'Despite the fact that a July cut would not have been enough to give most mortgage holders a meaningful reprieve, it would have been welcome by the millions of Aussies who are holding out for more cost-of-living relief,' he said.
'Nobody will be breaking out the Wagyu beef or shiraz.
RBA governor Michele Bullock said the board was waiting to confirm whether inflation was 'still on track' awaiting the release of the more complete quarterly ABS data.
'The board decided to wait a few weeks to confirm that we're still on track to meet our inflation expectation,' she said.
'This is a very fluid situation and we will continue to watch the data here and overseas to see how it plays.
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