Confidence may grow as Victoria reopens
Confidence among Australians has held up in the face of coronavirus lockdowns, which at one stage saw over half the population enduring stay-at-home orders.
As those restrictions have eased in recent weeks, consumer confidence has strengthened, a positive for future household spending.
The weekly ANZ-Roy Morgan consumer confidence index is released on Tuesday, which will take into account Victoria's reopening from lockdown last Friday.
Victorian Premier Daniel Andrews also announced a further easing in restrictions for this Friday when the state is expected to reach an 80 per cent double-dosed vaccination rate.
The confidence index has already risen for six weeks in a row.
The survey has also seen inflation expectations rise to their highest level since 2014, coming at a time of surging petrol prices.
In the past week, the Australian average for unleaded petrol rose 8.8 cents per litre to a record of 169.5 cents.
Rising fuel costs are expected to feature in Wednesday's release of the consumer price index for the September quarter.
However, underlying inflation - which smooths out excessive price swings and is more linked to interest rate decisions made by the RBA - is likely to remain subdued and below the two to three per cent target band.
The Reserve Bank of Australia has repeatedly said it will not lift the cash rate until inflation is sustainably within the target band, something it does not expect to occur before 2024.
However, the independent central bank has also repeatedly missed this target band since 2015, prompting calls for a review of this policy stance and its operations more broadly.
Treasurer Josh Frydenberg believes there is a case for such a review, given there hasn't been one for a number of years.
The Grattan Institute is holding a webinar on Tuesday to discuss a potential review and what it should cover.
Among its panel of experts is former RBA board member Warwick McKibbin.
