Australian consumer confidence declined for the third consecutive month in February 2026.
The Australian consumer confidence index fell 2.6% to 90.5 points in February 2026 due to pressures from rising interest rates and the high cost of living.
The Australian consumer confidence index recorded its third consecutive monthly decline in February 2026, falling to 90.5 points. According to a survey by the Westpac-Melbourne Institute released on February 10th, the main reasons for this trend are the latest interest rate hike and rising living costs, making home ownership more difficult.
Pressure from the RBA's interest rate hike trajectory.
Since November 2025, the confidence index has fallen by a total of 12.8%. Market pessimism increased after the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 3.85% last week, while leaving open the possibility of further tightening monetary policy to control inflation.
Matthew Hassan, Head of Macroeconomic Forecasting at Westpac, noted that consumers are bracing for further interest rate hikes. Survey results show that over 80% of respondents expect mortgage rates to rise in the next 12 months, with more than a third predicting an increase of at least 1 percentage point.
Household financial situation deteriorated.
Detailed data shows that the index measuring the financial situation of households compared to a year earlier fell sharply by 4.7% in February 2026. In addition, the country's long-term economic outlook also weakened with a 2.5% decline.
| Survey Index (February 2026) | Change rate (%) |
|---|---|
| General consumer confidence | -2.6 |
| Household financial situation | -4.7 |
| Ease of shopping for household goods | -5.6 |
| Long-term economic outlook | -2.5 |
Negative signals for the retail sector.
Notably, the index reflecting the ease of purchasing major household items recorded a sharp decline of 5.6%. This indicates that Australian consumers are becoming increasingly cautious in their spending as borrowing costs and commodity prices remain high. This tightening trend is expected to put direct pressure on retail sales in the coming quarters.
