Australians are feeling the pinch as petrol prices climb with consumer confidence dropping 4.3%, a significant 15.1% below the same week a year ago.

Consumer confidence is now at its lowest since October 2020, according to the latest ANZ-Roy Morgan data. It is sitting below the neutral level of 100 in all states, declining in New South Wales, Victoria, Queensland and South Australia but was up slightly in Western Australia.

Also driving the weekly drop were falls in sentiment relating to personal finances and the performance of the economy over the next five years. Buying intentions for household items deteriorated slightly too.

Household inflation expectations also jumped to 5.6% last week, its highest level since November 2012.

Rapid gains in petrol prices are the likely reason for the lift, ANZ head of Australian Economics, David Plank said. “Households are certainly noticing the effect of higher prices on their finances, with all sub-indices lower. The surge in inflation expectations also heightens the risk of a shift in the ‘psychology’ of inflation that requires more aggressive action from the Reserve Bank,” he said.

“However, if the recent fall in oil prices is sustained, we would expect inflation expectations to ease.”