Almost two thirds of Australians claim that reduced job security and economic doubts would make them stop or think twice about making financial decisions, according to a recent survey.
New research released by financial institution CUA found that 62 per cent of people surveyed weren’t comfortable with their levels of job security, while 64 per cent said doubts about the strength of the Australian economy would affect their financial decision making.
Jason Murray, CUA's general manager, said the poor outlook is likely to continue.
“The weakening labour market is clearly having an impact on consumer sentiment and directly affecting spending intentions. Given the outlook for a further softening in jobs growth, this sentiment is one we would expect to continue,” he said.
When it comes to interest rate expectations, CUA’s survey shows that while 58 per cent of Australians believe rates will stay on hold at the Reserve Bank of Australia’s board meeting next Tuesday, a greater percentage expect them to increase over the next six months (43 per cent) than decrease (18 per cent).
“With rates so low at the moment, it isn’t surprising to see more Australians believing they will rise in the near future, despite the expectation of some commentators that they will be cut even further,” Mr Murray said.
“Our research reveals that if rates do rise, a majority of variable rate mortgage holders say they would look to cut back on recreational activities to meet increased mortgage repayments.
“However, just over half said they would actually increase their repayments on top of the interest rate increase to ensure they continue to put extra towards their home loan,” Mr Murray said.