Australian consumer sentiment slides under rates, petrol pressure

A Westpac-Melbourne Institute survey showed its main index of consumer sentiment slid 5.2% to 84.4 in September, reversing almost all of a 6.0% gain in the previous month. ⁠The index was still down almost 12% from a year earlier, with pessimists outnumbering optimists by a wide margin.

"Both fuel prices and interest rates again look to be driving the move," said Matthew Hassan, Westpac's head of Australian macro-forecasting. "It has likely also added to unease about the continued weakening in housing markets."

The survey was taken in the wake of data showing ‌core inflation ⁠running above forecasts in July, fanning speculation that the Reserve Bank of Australia would have to raise interest rates for a fourth time this year.

This combined with rising petrol prices to knock ⁠the survey's measure of family finances down a steep 9.2% in September.

A measure of the economic outlook also showed large declines, as did ⁠the index on whether it was a good time to buy a major household item.

Worries about falling house prices ⁠weighed heavily on those with a mortgage, where sentiment dived 13% in September, compared with just a 0.6% drop for renters.