Economic Buzz: Australia Westpac consumer sentiment falls sharply in Feb after RBA rate hike

Australia?s consumer sentiment weakened for a third straight month in February, a private survey showed on Tuesday, with the latest drop coming after an interest rate hike by the Reserve Bank.

The Westpac-Melbourne Institute consumer sentiment index fell 2.6% to 90.5 in early-February, following a 1.7% drop in the prior month.

The drop in sentiment came amid heightened concerns over resurgent inflation, with the RBA?s recent 25 basis point hike adding to worries about the high cost of living.

The survey showed consumers were wary over more mortgage rate increases in the coming months, with the RBA also signaling that it remained open to more hikes in order to curb inflation.

The Westpac survey showed family finances deteriorated sharply in February, while consumers also soured on the long-term outlook for the economy.

Still, Westpac head of Australian macro forecasting, Matthew Hassan, said that the drop in sentiment was relatively smaller than declines seen during earlier interest rate hikes.

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