Confidence among mortgaged households has crashed to its lowest level in more than three decades amid a growing sense of “helplessness” about the economy, even as a dramatic shift in financial markets suggests there is now a strong chance of a Reserve Bank rate cut by this time next year.

The latest Westpac survey showed its consumer sentiment index sinking again in November to reach a four-year low, amid deepening pessimism about the near-term prospects for the economy .

As Labor comes under increasing pressure over persistent cost-of-living pressures , the prime minister, Anthony Albanese, played down tensions with the treasurer, Jim Chalmers.

A day after the frontbencher Murray Watt called for colleagues to stop undermining Chalmers, Albanese said: “The treasurer is doing a great job”.

The PM said he was working closely with Chalmers in the lead-up to next month’s mid-year budget update, which will include cuts to government spending as pressure mounts to contain inflation.

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