ANZ-Roy Morgan Consumer Confidence has dropped 2.1 points to 86.5 this week after the Reserve Bank decided to leave official interest rates unchanged last week at 3.85 per cent.
Consumer confidence is now 8 points above the same week a year ago, but in line with the 2025 weekly average of 86.6.
ANZ economist Sophia Angala said the “surprising” cash rate pause is likely behind the fall this week.
“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 (we expect 25bp cuts in August and November) flow through to households,” Angala said.
This week’s decrease was driven by less confidence about Australia’s economic performance over the next year and next five years.
Over a fifth of Australians (21 per cent - up 1ppt) say their families are ‘better off’ financially than this time last year compared to 44 per cent (up 2ppts) that say their families are ‘worse off’.
Net views on personal finances over the next year were virtually unchanged this week with 30 per cent (up 1ppt) of respondents expecting their family will be ‘better off’ financially this time next year, while 33 per cent (up 1ppt) expect to be ‘worse off’.
Just 11 per cent (unchanged) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to 30 per cent (up 3ppts) that expect ‘bad times’.
Views regarding the Australian economy in the longer-term also dropped this week with 12 per cent (down 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 24 per cent (up 3ppts) expecting ‘bad times’.
Meanwhile, net buying intentions were virtually unchanged this week with a quarter of respondents (25 per cent - unchanged) saying now is a ‘good time to buy’ major household items compared to 35 per cent (up 1ppt) that say now is a ‘bad time to buy major household items’.
“Mortgage holder confidence was steady last week despite the surprise hold by the RBA, though previous rate cuts this year have lifted mortgage-holder confidence and seem to have eased outright owner confidence,” Angala said. “Outright owners are more likely to benefit from higher interest rates as they are more likely to be net savers.”
An analysis by state shows mixed results with consumer confidence down in Victoria, New South Wales and Western Australia, but up in South Australia and Queensland.