Another interest rate hike risks pushing Australia into recession
Consumer confidence has hit its lowest level since the early 1990s recession.
Australia's consumer confidence has hit its lowest level since the early 1990s recession. The Westpac Melbourne Institute index dropped 4.7 per cent to 80.4 in October.
After the RBA's rate rise to 4.6 per cent in September, it fell further to 67.2. Australia Institute chief economist Greg Jericho said recession remains unlikely but is possible if rates climb higher.
Some households are feeling pressure from petrol prices that have jumped almost 25 per cent this year. Most people also expect more mortgage rate rises.
Unemployment has also risen 0.6 percentage points since January. Governor Michele Bullock acknowledged recession could happen if inflation expectations get away from us and the bank needed to tighten sharply.
Major banks are divided on the next rate move, but none expect rate cuts until the second half of 2027.
- 4.6 per cent
- Cash rate
- 0.6 percentage points since January
- Unemployment rise
- Almost 25 per cent this year
- Petrol price jump
Why it mattersA recession would mean fewer jobs, lower wages and harder financial conditions for millions of Australians already struggling with mortgage repayments and living costs.
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