Bleak financial outlook.

Consumer confidence plunged 3.5% last week to its lowest level in over two years, according to the latest ANZ Roy Morgan data. But in good news for retailers, the ‘time to buy a household item’ was the only sub-index in the positive, albeit eking out a 0.2% gain.

While households were feeling okay about their current financial situation, it was a different story when it came to the financial outlook for both their own finances and the economy, ANZ senior economist, Felicity Emmett said.

“Last week’s reported fall in business conditions to a five-year low, the weekend attack on Saudi Arabia’s oil and ongoing broader concerns about both the domestic and global economic outlook are now clearly weighing on consumer sentiment,” she said. Adding it was a disappointing development, suggesting that expectations for tax and interest rate cuts to spur the consumer to lift the economy may be misplaced.

The financial conditions sub-components dropped sharply, with current finances down 4.6%, the third consecutive weekly decline, while future finances were down 4.8%. Economic conditions sub-indices were also down, with current economic conditions losing 0.6% and future economic conditions falling by a sharp 7.6%, bringing it to a two-year low.