Consumer confidence dropped to its lowest point this year, according to new Roy Morgan data, as Australia waits on the Reserve Bank’s pivotal rates decision, due later today.
Consumer confidence dropped to its lowest point this year, according to new Roy Morgan data, as Australia waits on the Reserve Bank’s pivotal rates decision, due later today.
Consumer confidence dropped 1.6 points to 85.1 at a national level, with just one-in-ten Australians surveyed expecting ‘good times’ ahead, while 29 per cent expected ‘bad times’.
One fifth of those surveyed said their families were better off financially compared to this time last year, compared to 50 per cent which said their families were worse off.
Consumer confidence now sits 2.3 points above the same week a year ago, and 1.6 points below the 2025 average.
Roy Morgan ANZ economist Sophia Angala said the measure was now at the lowest it has been in 2025.
“The four-week moving average has remaining within the tight 86.0-86.9pts range since the beginning of January,” she said.
“This week’s decline in the series was largely due to a fall in households’ confidence in their personal finances.
“Both financial conditions subindices fell to a 2025 low, as confidence in the financial outlook over the next year recorded its largest weekly decline since June 2024.
“Meanwhile, households’ confidence in the short- and long-term economic outlook are still above their H2 2024 averages in the year so far.”
The new data comes just hours before the Reserve Bank of Australia will make its highly-anticipated February rates call – with the market widely expecting the central bank to cut rates for the first time since November 2020.
The cash rate has remained unchanged at 4.35 per cent since November 2023, with RBA governor Michele Bullock in December saying the board needed to see progress on bringing down underlying inflation before they moved on rates.
Trimmed mean inflation is currently at its lowest level since December 2021, a figure Canstar.com.au data insights director Sally Tindall said was a step in the right direction and would be well received by the Reserve Bank.
“The RBA knows how tough it’s been for borrowers with a mortgage and also renters under the pressure of the current cash rate,” she said.
“While annual core inflation might not yet be in the RBA’s target band, it should be close enough to warrant action.
“A rate cut in February has the potential to inject almost $100 a month back into the budget of someone with a $600,000 mortgage with what should be at least one more rate cut waiting in the wings.”
That extra cash would go a long way to validating Prime Minister Anthony Albanese’s claims of good economic management ahead of this year’s federal election.
But Mr Albanese wasn’t jumping the gun today, instead saying he had done what he could to curb inflation.
“We respect the independent decision that (the RBA) will make,” he told ABC radio this morning.
“They’ll make the decision based on economics, not based upon any politics.
“What our job has been to do is get inflation down – we’ve done that.”
Mr Albanese noted financial pressures continue to weigh on families but says Australia has avoided some of the worst economic consequences while providing help through tax cuts, energy bill relief, cheaper childcare and other policies.
"This has been a global inflation spike and overseas, it hit double digits in some places," he said.
"Our neighbours in New Zealand are in a deep recession.
“We’ve managed to avoid that, the economy has continued to grow, we’ve created more jobs than any government since federation.”
But a rate cut could offer enough momentum to turn the political tide and deliver an election advantage for Mr Albanese.
The election must be held by May 17 but there is speculation the first lowering of interest rates in almost five years could prompt the government to go to the polls sooner.
Opinion polls show the government still has a way to go to win a second term, with the latest Newspoll revealing the coalition leading 51 per cent to 49 on a two-party preferred basis.
The coalition remains ahead of Labor in the latest Roy Morgan results, which point to a hung parliament after the election.
If the Reserve Bank decides not to cut interest rates today, there would be just one more meeting, April 1, before the election deadline.
