Sentiment declined 1.3% to 81 points, with pessimists heavily outweighing optimists given a reading of 100 is the dividing line, a Westpac Banking Corp. survey showed on Tuesday. The index has held below 100 since February 2022.

“The latest January read is in the bottom 7% of all observations since the survey was first run in the mid-1970s,” said Matthew Hassan, a senior economist at Westpac. “More pessimistic starts to the year have only been seen during the deep recession of the early 1990s.”

The Reserve Bank of Australia has raised rates by 4.25 percentage points since May 2022, its most aggressive tightening cycle in a generation in a bid to rein in inflation. The hikes have hammered consumer confidence as Australians hunkered down in the face of rising mortgage repayments.

Read more: Australian Inflation Eases, Boosting Case for Rate Pause 

The nation’s household debt-to-income ratio is among the world’s highest at 185.4%.

The RBA last kept borrowing costs at a 12-year-high of 4.35% after a surprise hike in November, and warned that further tightening may be required amid a tight labour market and strengthening wage growth. Most economists believe the bank is now done hiking — and that the next move will see rates go down, not up.

“Despite easing rate rise fears, consumers are much more ‘hawkish’ on the interest rate outlook in Australia than both financial markets and economists,” Hassan said.