Consumer confidence has fallen to one of its weakest readings on record, as Australians grow more pessimistic about their household finances after the Reserve Bank lifted interest rates to an 18-year high.
The ANZ-Roy Morgan Consumer Confidence index dropped 3.1 points to 63.1 this week, following the RBA’s 25-basis-point hike to 4.85 per cent. It was the lowest result since early April and the third-lowest since the series began in 1973.
Confidence was 20.4 points lower than the same week last year, when it sat at 84.5. It was also 8.5 points below the 2026 weekly average of 71.6.
Confidence in personal finances fell for a second straight week, and this drove the decline. Just 12 per cent of Australians said their families were better off financially than a year ago, down two percentage points. A record 61 per cent said they were worse off, up five points.
Expectations for the year ahead also weakened. Only 17 per cent of respondents expected their family to be better off financially this time next year, equal to the record low for the indicator. Meanwhile, 49 per cent expected to be worse off, up five points.
ANZ economist Sophia Angala said the rate hike, which took the cash rate to its highest level since 2008, likely weighed on the result. She noted that confidence fell across all housing cohorts, and mortgage holder confidence dropped to its lowest level since the weekly series began in 2008.
“We think the cash rate has likely peaked at 4.85 per cent, although the risks remain tilted towards further tightening given the RBA’s concern about inflation expectations,” Angala said.
“Together, elevated rates and historically weak confidence are likely to weigh on household spending.”
Buying intentions were unchanged. Only 14 per cent of respondents said now was a good time to buy major household items, while 48 per cent said it was a bad time.
Views on the economy also deteriorated. Only 4 per cent of Australians expected good times over the next 12 months, down one point, while 49 per cent expected bad times, up one point. Longer-term views were unchanged: 7 per cent expected good times over the next five years and 32 per cent expected bad times.
Confidence fell in Victoria, Queensland and Western Australia. It rose slightly in New South Wales and South Australia.