WATCH: confidence, inflation & rates

Consumer confidence in Australia has hit a six-month high, ahead of June quarter inflation data and the Reserve Bank of Australia’s August meeting.

In the week to July 21, the ANZ-Roy Morgan Australian Consumer Confidence index recorded its largest weekly rise since April 2021, jumping to 84.4 points.

Speaking on video, ANZ Economist Madeline Dunk said the measure would be watched closely over the coming weeks to see if the rise is sustained.

ANZ Research had previously expected confidence to pick up in the second half of 2024, she said, as tax cuts and cost of living relief supports household incomes. Focus will now turn to upcoming inflation data from the Australian Bureau of Statistics.

“If inflation data comes in a bit stronger than expected, that could spur talk about the potential for the RBA to increase rates in August,” Dunk said.

“While we can’t rule out an August rate hike, we do think it’s unlikely and our view is that the next move in rates will be down.”

ANZ Research expects rates will stay on hold at 4.35 per cent before a 25 basis point cut in February 2025.

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The lift was driven by all components of the index, with households “feeling a bit better about their own finances and also the economic outlook”, Dunk noted.

“Now that we’re in late July, most households would have received at least one pay and may have noticed a few extra dollars in their bank balance,” she said.

Despite the improvement, the overall level of confidence remains very low.