Confidence hit from all angles

Australian spending confidence has been hit from three different directions, one expert has claimed.

Bill Evans, chief economist at Westpac, has claimed that the government’s bungled handling of deposit guarantees, falling house prices and the tumbling dollar have all combined to deliver a triple blow to consumer confidence.

He told the Advertiser that while new figures have suggested that consumer confidence is up slightly from September – when the banking crisis hit – it has still fallen 22.6 per cent when compared to last year’s data.

Mr Evans explained: “Households have been unsettled by the ongoing disturbances in financial markets associated with the global credit crisis.”

Lower consumer confidence may indicate that consumers are less willing to spend on credit cards and personal loans and instead look to plough cash into high-interest savings accounts.

Indeed, figures cited by the Daily Telegraph last month have shown that Australians have begun putting more money aside in an effort to avoid the impact of the economic crisis.ADNFCR-1761-ID-18877569-ADNFCR