Australia’s Westpac–Melbourne Institute Consumer Sentiment Index fell 3.5% month-over-month to 80.6 in June 2026, erasing May’s gain and marking the fourth decline so far this year. Persistent cost-of-living pressures remained the main drag, with the temporary halving of the fuel excise providing only brief relief. Household finances deteriorated notably: assessments compared with a year ago dropped 7.5% to 67.3, while expectations for the next 12 months declined 8.5% to 85.1.
Perceptions of the broader economy were mixed. The one-year economic outlook improved 4.9% to 77.8, but the five-year outlook fell 3.2% to 86.5, its lowest level in three years. The “time to buy a major item” index inched up 0.9% to 86.4, and unemployment expectations eased marginally, down 0.1% to 139.8.
Westpac economist Matthew Hassan noted that the effects of three interest rate hikes this year are becoming increasingly visible. However, inflation remains the primary concern, with higher energy costs yet to fully flow through. While a pause in rate hikes is possible at the next policy meeting, Westpac still anticipates further tightening later in the year.
