Consumer confidence has sunk to its lowest level since the early days of the pandemic after the latest interest rate hike.

The weekly index assembled by ANZ and Roy Morgan plummeted 5.5 points last week to 78.1, its lowest level since early April 2020.

The sharp drop in consumer sentiment follows a 3.2 point dip the week before.

The Reserve Bank’s February cash rate hike of 25 basis points weighed on survey respondents, with the “current economic conditions” gauge plunging 9.3 points.

“Time to buy a major household item” tanked by 11 points, and “current financial conditions” and “future financial conditions” also tumbled.

ANZ senior economist Adelaide Timbrell said this was the sharpest weekly drop in confidence since the RBA kicked its rate hikes up a gear to 50 basis points in June 2022.

“The average confidence among people paying off their mortgages fell sharper than other housing cohorts last week, by 10 points, to its lowest since early April 2020.”

Households are bracing for higher mortgage repayments off the back of the Reserve Bank’s latest cash rate hike, the ninth increase since May.

The central bank also flagged at least two more increases to bring down soaring inflation.

Assistant Treasurer Stephen Jones said there were particular concerns for the 800,000 mortgage holders on fixed rates who were yet to feel the full brunt of rising rates.

“We’re hoping that we don’t see further interest rate increases,” he told ABC TV on Tuesday.

“The Australian government will do its bit to ensure that we are bringing down the pressure on inflation, which is why we hope the Reserve Bank board … aren’t lifting interest rates any further than they absolutely need to be to tame the inflation dragon.”

Opposition frontbencher Simon Birmingham said the assistant treasurer needed to stop undermining the messaging of the RBA.

“Treasurer Jim Chalmers and Prime Minister Anthony Albanese need to pull Stephen Jones into line, or push him out of the ministry if he’s going to continue to speak out of turn and undermine the independent Reserve Bank,” he told Sky News.

But Senator Birmingham also said he would prefer interest rates went no higher.

“And that’s why we would rather see a government not attack the Reserve Bank, but make the Reserve Bank’s job easier by ensuring that fiscal policy is working in tandem with monetary policy.”

Several MPs, including Labor backbenchers, have questioned the future of RBA governor Philip Lowe for his predictions that interest rates would remain steady before the central bank embarked on a series of quick-fire rises.

Asked if he believed Dr Lowe was doing a good job, Mr Jones declined to weigh in, saying he had a “very tough job”.

“I don’t think it helps if the treasurer … or any of the other senior ministers of government are taking potshots at the Reserve Bank or providing assessments of their performance,” he said.

Treasurer Jim Chalmers will make a call on Dr Lowe’s ongoing leadership in the middle of the year after an independent review of the central bank is handed down next month.

– AAP