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Lower petrol prices drive consumer confidence to highest level since July

Consumer sentiment continues to recover from the dive it took during the Wentworth by-election weekend, reaching its highest level since late July, according to the ANZ-Roy Morgan Australian Consumer Confidence index.

Performance across both financial and economic conditions was positive, with consumer views about current financial conditions approaching the highest level seen since the GFC.

Households’ perceptions of current financial conditions and future financial situation rose by 3.9 per cent and 2.2 per cent respectively.

At the same time, views about current and future economic conditions jumped by 7 per cent and 4.5 per cent respectively.

The ‘time to buy a household item’ sub-index fell by 3.1 per cent, only partially reversing the prior week’s gain of more than 9 per cent. Four-week moving average inflation fell by 0.1 percentage points to 4.4 per cent.

This marks the third consecutive gain in consumer confidence since the sharp fall recorded during the weekend of the Wentworth by-election.

ANZ head of Australian economics David Plank said that the recent easing in petrol prices and rebound in equity markets could be factors in the boost.

“Last week’s RBA statement on monetary policy was quite upbeat on the Australian economy. At the same time, the bank’s message of no near-term hikes in the interest rate was reassuring for households,” he said.

Plank added that Q3 wage data coming out this week may impact household sentiment.

“We think this will be boosted by the rise in the minimum wage and the finalising of some enterprise agreements.”

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