Consumer confidence in Australia declined last week following the Reserve Bank of Australia's (RBA) decision to keep the cash rate unchanged at 3.60 percent. The ANZ-Roy Morgan Australian Consumer Confidence index dropped by 1.2 points to 85.1, with its four-week moving average also decreasing by 1.0 point to 85.5.
Weekly inflation expectations rose slightly, increasing by 0.1 percentage point to 5.2 percent, while the four-week moving average climbed by 0.2 percentage points to reach 5.1 percent.
Indicators of financial conditions showed declines as well. Assessments of current financial conditions over the past year fell by 1.5 points, and expectations for future financial conditions over the next twelve months decreased by 1.0 point.
Short-term economic confidence, which reflects views on the economy over the coming year, was down by 1.1 points, and medium-term economic confidence covering a five-year horizon dropped by 0.6 points.
The subindex measuring whether it is a good time to buy major household items also declined, falling by 1.6 points.
Commenting on these developments, ANZ Economist Sophia Angala said: "The RBA Board held the cash rate at 3.60 per cent last week, with the post-meeting commentary a little more hawkish than we expected. This was likely a factor in the week’s 1.2 point fall in ANZ-Roy Morgan Australian Consumer Confidence. On a four-week moving average basis, weekly inflation expectations are at their highest level since late January. This may have been influenced by the RBA’s post-meeting statement noting that Q3 inflation may come in higher than RBA expectations."
Angala added: "We now expect a 0.9 per cent q/q increase in trimmed mean (underlying) inflation in Q3, which suggests the RBA will hold the cash rate for the remainder of the year."
She continued: "We now expect the RBA to cut the cash rate by 25 basis point in February 2026, and for the cash rate to then stay at 3.35 per cent for an extended period. The absence of a widely anticipated rate cut later this year could see a slowing of the consumer recovery."