Consumer confidence has slipped to its lowest level since late May, as Australians brace for an expected interest rate rise at the Reserve Bank’s Melbourne Cup Day meeting today.
The ANZ-Roy Morgan Consumer Confidence index fell 1.7 points to 66.2 this week. That is 18.3 points below the same time last year, and 5.6 points under the 2026 weekly average of 71.8.
The decline was driven by weaker sentiment about personal finances. Only 14 per cent of Australians said their families were better off than a year ago, down two percentage points, while 56 per cent said they were worse off, up four points.
Expectations for the year ahead also softened. Some 19 per cent of respondents expected their family to be better off this time next year, unchanged, while 44 per cent expected to be worse off, up two points.
Buying intentions held steady but were weak. Just 14 per cent said now was a good time to buy major household items, compared with 48 per cent who said it was a bad time.
Views on the broader economy were little changed. Only 5 per cent of Australians expected good times over the next 12 months, while 48 per cent expected bad times, up one percentage point. Over the next five years, 7 per cent expected good times and 32 per cent expected bad times.
Confidence fell in New South Wales, Queensland, Western Australia and South Australia, while Victoria edged up slightly, reversing the previous week’s result.
ANZ economist Sophia Angala said inflation expectations remained at their highest level since late May on a four-week moving average basis. This followed the latest quarterly CPI data, which showed annual trimmed mean inflation came in slightly stronger than expected at 3.7 per cent.
ANZ expects the Reserve Bank to lift the cash rate by 25 basis points, and sees some risk it reaches 5.10 per cent in December or February.
“Elevated inflation and the higher interest rate environment are likely to weigh on household spending, particularly as economic activity remains soft and if the unemployment rate trends higher,” Angala said.