Further rate cuts from the Reserve Bank could prove counterproductive and make consumers more pessimistic, ANZ's chief economist says.
Consumer confidence took a dive last week, falling to its lowest level in four months, according to the latest ANZ-Roy Morgan consumer confidence survey.
The sharp fall was spurred by disappointing economic growth figures, which sparked talk of more RBA rate cuts and headlines about the government's economic management.
NAB on Tuesday joined Westpac, and several other economists, in forecasting two rate cuts in 2015.
The ANZ-Roy Morgan survey showed households were more concerned about the economic outlook over the next year, and next five years.
Talk of further rate cuts could have a negative impact on confidence, ANZ chief economist Warren Hogan said.
"We think a key question for monetary policy right now is: would rate cuts help build confidence or generate more concern and uncertainty about the future of the economy?" he said.
"Today's number suggests that it may be the latter.
"We will be watching the weekly numbers closely over the Christmas shopping season to gauge the momentum the economy will take into 2015."
On a positive note, households considered their current financial position to be better than it was a year ago, an encouraging sign ahead of the Christmas shopping period.
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