RBA crashes economic sentiment across Australia

Last week’s 25 bp hike in the official cash rate by the Reserve Bank of Australia (RBA) – the third consecutive increase – may have been the ‘straw that broke the camel’s back’.

As illustrated below by Alex Joiner from IFM Investors, NAB’s business survey showed that business confidence remains in deeply pessimistic territory, while conditions (which track GDP growth more tightly) have continued to soften:

“The risk for the RBA, is that the deterioration we are observing in the leading indicator data leads to a greater than expected slowdown in the hard data”, noted Joiner via Twitter (X).