Australian consumer sentiment hit a four-year low of 78.2 in November as inflation and rising borrowing costs drove mortgage-holder confidence to a record low of 68.1, prompting expectations of an RBA pause.
Consumer sentiment fell 2.7% to 78.2 in November, a four-year low, with mortgage-holder confidence collapsing 11.6% to a record 68.1 and 12-month economic expectations down 10.2% to 70.3. Weakening household confidence and spending intentions point to softer growth, weighing on the Australian dollar. However, annual inflation of 4.3% and expectations of further RBA tightening cut the other way, leaving the picture mixed.
The Westpac–Melbourne Institute Consumer Sentiment Index fell to 78.2 in November, marking a four-year low. The decline was fueled by a 10.2% drop in 12-month economic expectations and record-low confidence among mortgage holders, who saw sentiment collapse 11.6% to 68.1. Despite these pressures, Westpac anticipates the RBA will pause its rate-hiking cycle at the December 7–8 meeting.
Sentiment at a four-year low of 78.2 and record-low mortgage-holder confidence signal slowing household demand, which weakens the growth outlook for the Australian economy and tends to pressure the currency.
The article notes the RBA has already raised rates five times this year to 4.85%, but Westpac expects a pause at the December 7-8 meeting and does not forecast a further hike, so the hawkish support for the AUD is limited.