Consumer Sentiment Slides to Lowest Since 2022
The Westpac-Melbourne Institute index fell 2.7% in November as households reacted to inflation and the latest RBA rate rise.
Updated on Nov. 10, 2026 in Spending
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Australian consumer sentiment fell 2.7% to 78.2 in November 2026, from 80.4 in October, reaching its lowest level since late 2022. Mortgage holder sentiment collapsed 11.6% to a record low of 68.1.
Why it matters
Falling household confidence signals that cost-of-living pressures and higher borrowing costs are weighing on spending decisions across the country. The reading follows a 25 basis point rise in the cash rate to 4.85%.
The Westpac-Melbourne Institute index recorded 78.2 in November, down 2.7% from October and the lowest reading since late 2022, while annual inflation stands at 4.3%. Westpac's survey data does not yet show whether the decline will continue into the following months.
The players
Reserve Bank of Australia
Australia's central bank, responsible for setting the cash rate and managing inflation through monetary policy.
Westpac
One of Australia's major banks, which publishes the consumer sentiment index with the Melbourne Institute and forecasts RBA policy.
Melbourne Institute
The University of Melbourne's economic research body that co-produces the consumer sentiment survey with Westpac.
The details
The consumer sentiment index fell from 80.4 to 78.2 after the Reserve Bank raised rates by 25 basis points to 4.85%. Respondents surveyed after the decision expected mortgage rate increases, and 72% of mortgage holders anticipate further rises.
Timeline
October 2026: Prior month sentiment reading of 80.4.
November 2026: Consumer sentiment index falls to 78.2.
7-8 December 2026: RBA expected to pause rate increases.
February 2027: Next likely RBA meeting where another hike could be considered.
Market Dynamics
The November reading places household sentiment at its lowest point since late 2022, in a series that tracks confidence across rate cycles. The next-12-months outlook index at 70.3 is its weakest since August 2020, reflecting a broader shift in how households view the economy ahead.
Mortgage holders face the prospect of further rate rises, with 72% expecting increases that could tighten household budgets. Households planning large purchases may defer spending while confidence remains at its lowest since late 2022.
The takeaway
Households reviewing their budgets may find it useful to test how a further rate rise would affect repayments before committing to new borrowing. Monitoring the RBA's December decision will clarify whether confidence stabilises.
What happens next
The RBA's next policy meeting is scheduled for 7-8 December 2026, when a pause is widely expected.
Further reading
Explore more on Spending in Australia to see how household budgets are responding to rising rates.
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