NAB forecasts interest rates to fall; iconic retailer collapses; World Cup politics
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use.
What is the current state of consumer sentiment in Australia?
Today, consumer sentiment hits 50-year lows while business confidence also takes a hit as one major bank now predicts the next move in interest rates will be down. Apple credits Australia's social media ban as inspiration for new safety features on iPhones and football's World Cup is two days away as politics threatens to overshadow the sport. Plus...
How is the Federal Liberal Party engaging with One Nation?
The Federal Liberal Party flirts with One Nation and an iconic Aussie retailer set to close. It is Wednesday the 10th of June 2026.
Why is Barbecues Galore closing down?
I'm Michael Thompson and good morning, Sean Aylmer. Good morning, Michael. Sean, the main story this morning, Australian consumers remain deeply pessimistic with consumer confidence falling further this month. And the Westpac Melbourne Institute Consumer Sentiment Index is now around the lowest it has been in its 50-year history.
How is business confidence affecting economic forecasts?
Things are not looking great.
What safety features has Apple introduced inspired by Australia's social media ban?
No.
Pessimists. Pessimists. That's a hard word to say. Pessimists. now outnumber Optimus by nearly 20%, with the cost of living the key issue for many people. The drop in fuel excise resulted in only a small reprieve, the survey says.
What are the political implications surrounding the upcoming World Cup?
Other concerns are starting to emerge among consumers, including a sharp drop in house price expectations. Respondents to the survey, on average, said things are worse now than 12 months ago, and will get even poorer over the next year. Westpac head of Australian macro forecasting, Matthew Hassan, said consumers are clearly bracing for more bad news on the financial front.
How are interest rates expected to change according to NAB?
It certainly sounds like it. Meanwhile, business confidence rose last month, but remains firmly negative, even though cost pressures do actually show some early signs of easing. This is according to the National Australia Bank monthly survey. There's a lot of data around right now. There is.
So the business confidence actually lifted 10 points to minus 14 index points. Now that was driven by gains in mining, wholesaling and transport. I mean, minus 14 points, confidence is firmly negative. Business conditions were unchanged at plus three index points, but that does sit below the long-run average. As trading conditions, employment and profitability all softened, profitability remains the weakest component, reflecting ongoing margin pressure across the economy. The National Australia Bank monthly survey has a great record of judging how businesses are feeling and what that means for economic growth. So that's one to look at.
Okay. I want you just to explain this a little bit for me because we obviously, we know that consumer confidence is important, right? Because people believe that a paycheck is coming in every month. They're more likely to keep spending and keep boosting the economy. It's a cycle, right? It is the same for businesses. If things look promising, a company is more likely to invest, which in turn boosts the economy.
Okay.
Does it still hold true? Given now, it feels like we've been talking about pessimistic consumers for such a long time. I can't remember a time when you have not been describing us as a miserable bunch. Grumpy. Yeah, miserable bunch.
I mean, it's a fair question. Probably the way to think of it is relatively. So consumers are even more pessimistic now than they were a year ago, much more than average over the long term. So yeah, it does matter. As far as what it means for interest rates, I think the Reserve Bank is mostly concerned about inflation at the moment. It wants price growth to come down before it worries too much about sentiment, be that business or consumer. Having said that, National Australia Bank yesterday scrapped its forecast for an August interest rate rise. It said the Reserve Bank's next move is more likely to be a cut as economic momentum slows and financial conditions tighten. The timing's unclear, but Chief Economist Sally Auld, who's got a good record in predicting interest rates, says she has greater conviction that the next move in rates is down.
Is that going to make us any less miserable, do you think, Sean? Maybe, if we say it enough.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:06–0:09
2
What is the current state of consumer sentiment in Australia?
0:09–0:31
3
How is the Federal Liberal Party engaging with One Nation?
0:31–0:39
4
Why is Barbecues Galore closing down?
0:39–1:01
5
How is business confidence affecting economic forecasts?
1:01–1:04
6
What safety features has Apple introduced inspired by Australia's social media ban?
1:04–1:21
7
What are the political implications surrounding the upcoming World Cup?
1:21–1:45
8
How are interest rates expected to change according to NAB?
1:45–18:47
Speakers
3 identifiedMore from FEAR & GREED | Business News
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