Households brace for toughest times since the start of the pandemic, confidence drops
Australians are still spending big bucks, but surveys suggest that could change quickly as rising interest rates send consumer confidence to pandemic lows. Key points: Consumer confidence has fallen to the lows usually seen during a recession Soaring inflation and a sudden spike in interest rates to combat it weigh on households The slump in confidence has yet to feed through spending cuts, with various measures hitting record highs The latest consumer spending data from the Australian Bureau of Statistics showed household spending was 7.9 per cent higher in May than a year earlier. Much of the increase in spending is not because Australians have had to buy more, but reflects a spike in inflation, meaning people are paying more for most of the things they buy. Transportation spending rose nearly 15 percent, as people once again took to the skies, but also as fuel costs soared. Eating out and going out together has also seen a double-digit percentage increase in spending over the past y