Australian Consumer Confidence Drops as Rate Boost Looks Likely

By James Glynn

SYDNEY--Australian consumer confidence fell last week, snapping a month of gains as speculation turned to the prospect of a further interest rate rise before the end of the year.

Consumer confidence fell 2.6 points last week, to 74.9 points, according to a survey by the ANZ Bank and pollster Roy Morgan.

Weekly inflation expectations were unchanged at 6.1%, while the four-week moving average rose 0.2 percentage points, to 5.9%, the survey showed.

The decline in confidence was broad-based, and led by decreasing confidence in future economic conditions, said ANZ economist Sophia Angala.

The fall may have reflected news last week of stronger-than-expected July inflation numbers, she added.

Given persistent inflation and the resilience in household spending, ANZ now expects the Reserve Bank of Australia to raise interest rates by 25 basis points, to 4.60%, in November, she said.

The threat of higher interest rates is also fueling a drop in house prices nationally. Economists expect a peak-to-trough fall of around 10%, with Sydney leading the retreat.

Stubborn strength in inflation has some economists forecasting an interest-rate increase later this month, adding to the three increases announced in the first half of the year.

The time to buy a major household item subindex dropped 3.4 points last week, the report showed.

The weekly ANZ-Roy Morgan Australian consumer-confidence rating is based on 1,055 interviews conducted online and over the telephone during the week to Sunday.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

August 31, 2026 19:44 ET (23:44 GMT)