The ANZ-Roy Morgan Consumer Confidence Index fell 0.5 per cent in the week ending July 10, to 115.2, which is below the four-week average of 116.7.

ANZ head of Australian economics Felicity Emmett said confidence had fallen almost 3 per cent, which partly reversed lifts in May and early June, when confidence reached a two-and-a-half-year high.

“Confidence has been buffeted by uncertainty surrounding the domestic political outlook, as well as concerns over global growth,” she said in a statement.

“The downgrade of Australia’s credit rating outlook by Standard and Poor’s is also likely to have weighed on consumer sentiment.”

The decline in confidence last week was driven by respondents’ pessimism about both the short-term and longer-term economic outlook.

Households were 4.1 per cent less confident about the economy over the next 12 months and 2.7 per cent more downbeat about the economic outlook over the next five years.

However, consumers’ views of their current finances compared to one year ago rose by 0.3 per cent and their views of their finances over the next 12 months were up sharply, by 4.3 per cent.

“Household sentiment remains well above its long-term average, although how sustainable this is remains to be seen,” Emmett said.

“That said, the fact that a hung parliament looks to have been narrowly avoided is encouraging.

“More important, though, will be the performance of the labour market. In this regard, we keenly await Thursday’s employment numbers.”

– AAP