Australian Consumer Mood Sinks as Rate Increases Loom

By James Glynn

SYDNEY--Australian consumer confidence weakened last week amid rising gloom over the future of fuel prices and blunt warnings from the Reserve Bank of Australia that interest rates will need to rise further.

Consumer confidence fell 1.9 points last week to a low 72.0 points, according to a survey by the ANZ Bank and pollster Roy Morgan.

The four-week moving average of confidence dropped 1.4 points, to 73.2 points, the data showed. Meanwhile, weekly inflation expectations rose 0.2 percentage points, to 6.1%.

"The recent re-escalation of conflict in the Middle East and sharp rise in oil and gasoline prices may be weighing on confidence and keeping inflation expectations elevated," said Sophia Angala, ANZ Economist.

RBA Governor Michele Bullock also noted in a parliamentary testimony last week that upside inflation risks appear to be "materializing," Angala added.

"With few signs of a resolution to the Middle East conflict over the near term, the RBA remains concerned inflation could prove more persistent," she said.

ANZ now expects the RBA to increase the cash rate by 25 basis points in September, with a second boost likely in November.

Confidence in both current financial conditions and short-term economic conditions were lower over the week, according to the survey.

The time to buy a major household item subindex eased 4.1 points over the week.

The weekly consumer confidence rating is based on 1,025 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

September 21, 2026 20:20 ET (00:20 GMT)