Confidence among Australian consumers worsened further to new lows in July amid surging inflation and interest rate hikes, survey data from Westpac showed on Tuesday.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 3.0 percent to 83.8 in July from 86.4 in June.
The sentiment is now down 19.7 percent since December, falling every month this year, Westpac said.
Moreover, the pace of deterioration in the index in July was earlier seen during periods of major disruption in the Australian economy. The survey was conducted among 1,200 households from July 4 to 7.
Among sub-components, consumers' opinion regarding the economy's outlook for the next five years worsened the most, with the sub-index falling by 6.7 percent to 91.6, and that for the next twelve months dropped by 4.2 percent to 80.3.
The index measuring consumers' financial situation in the next twelve months is broadly unchanged. The 'finances vs a year ago' sub-index recorded a milder 2.8 percent fall.
Meanwhile, the 'time to buy a major household item' dropped 0.9 percent from the previous month.
At the August meeting, the Reserve Bank of Australia is expected to raise its cash rate by a further 50 basis points, taking it to 1.85 percent, Westpac Chief Economist Bill Evans said.
To deliver its commitment to containing inflation, the RBA will need to continue taking strong actions with policy, pushing the cash rate from a very stimulatory starting point to something well into the neutral zone, Evans noted.
