Australian consumer sentiment hits four-year low in November as rates rise

SYDNEY, Nov 10 (Reuters) - A measure of Australian consumer sentiment fell for a third month in November to its lowest level in four years, a survey showed on Tuesday, as rising interest rates added to cost-of-living pressures and soured confidence in the economic outlook.

The Westpac-Melbourne Institute survey’s main index of consumer sentiment fell 2.7% to 78.2 in November, after large declines of 4.7% and 5.2% in October and September. The index was down almost 25% from a year earlier, with pessimists outnumbering optimists by a wide margin.

"Australian consumers remain deeply pessimistic, sentiment continuing to plumb extreme lows," said Matthew Hassan, Westpac’s head of Australian macro-forecasting. "Consumers are bracing for more rate rises."

The survey was taken as the Reserve Bank of Australia raised interest rates for the fifth time this year, taking them to an 18-year high of 4.85% to fight inflation. 

The impact of the rate rise was seen in the 10.2% fall in the survey’s measure of the economic outlook over the next 12 months. Another sub-index measuring whether it was a good time to buy a major household item fell 3.7%.