Australian Consumer Sentiment Slumps to Recessionary Levels Amid Rate Hike Fears

Key Facts

1The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October.

2Westpac expects the Reserve Bank of Australia to hike interest rates again at its November 2–3 meeting.

3Sentiment among post-RBA decision respondents dropped to 67.2, levels previously seen only in the early 1990s recession.

The Westpac-Melbourne Institute Consumer Sentiment Index in Australia fell 4.7% to 80.4 in October. According to investinglive.com, sentiment among respondents surveyed after the latest interest rate decision plunged to 67.2, levels previously seen only during the deep recession of the early 1990s. Despite this slump, Westpac expects the Reserve Bank of Australia (RBA) to hike interest rates again at its upcoming meeting on November 2–3.

The decline in household outlook follows the cash rate reaching 4.6%, its highest level since 2011, alongside petrol prices climbing above $2.30 a litre. Reference data shows the RBA raised interest rates to 4.6% from 4.35% on September 29, 2026, intensifying pressure on consumer spending. While the Trimmed Mean CPI was recorded at 3.6% on September 30, 2026, persistent inflationary pressures continue to support hawkish monetary expectations.