Australia’s Westpac–Melbourne Institute Consumer Sentiment Index rose 4.1% to 83.9 in July 2026, reversing June’s 2.9% decline as concerns over energy costs, rising interest rates, and labor market weakness eased. Nonetheless, confidence remains historically fragile, still sitting in the lowest 10% of readings across the survey’s 50-year history and highly exposed to global shocks, particularly ongoing tensions in the Middle East.
Households reported a noticeably brighter view of their finances. Assessments of financial conditions over the past year rose 5.6% to 71.1, while expectations for the year ahead jumped 13.4% to 96.5. Broader economic sentiment also improved, with the one-year economic outlook edging up 0.6% to 78.3 and the five-year outlook increasing 0.7% to 87.1.
The index tracking whether it is a good time to buy major household items inched 0.5% higher to 86.8, and unemployment expectations weakened by 7.1% to 129.9, indicating reduced anxiety about job losses. Even so, Westpac economist Matthew Hassan warned that inflation remains the Reserve Bank’s primary concern. He noted that the June-quarter CPI reading will likely be pivotal for the August policy meeting, where he anticipates another 25bp rate hike.
