FX.co ★ Australian Consumer Mood Slumps to 2-1/2-Year Low

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index dropped 12.5% month-on-month to 80.1 in April 2026, its lowest level in two and a half years, wiping out a 1.2% rise in March. The sharp deterioration was driven by a spike in fuel prices amid the U.S.–Israel conflict with Iran, alongside a further 25 bp rate hike by the Reserve Bank. Household finances weakened markedly: assessments versus a year ago fell 16.7% to 66.8, while expectations for the next 12 months declined 13.9% to 84.0. Views on economic conditions over the next year dropped 12.4% to 75.3, and the five-year outlook eased 5.1% to 91.4. The “time to buy a major household item” index slid 15.0% to 83.3. Job-loss fears rose 9.7% to 147.8, a five-and-a-half-year high. Westpac economist Matthew Hassan noted that the current shock is weighing more heavily on labour market expectations than the 2022–24 “cost-of-living crisis.” He expects the central bank to remain focused on inflation, forecasting another 25 bp rate hike in May, with further tightening later in the year.