Australia consumer sentiment hits 6-mth low in Oct on inflation fears - Westpac

Published 07/10/2025, 01:08
© Reuters.

Investing.com-- Australian consumer sentiment slid to a six-month low in October as renewed concerns over inflation and the economic outlook weighed on households, a survey by Westpac showed on Tuesday.

The Westpac-Melbourne Institute Consumer Sentiment Index dropped 3.5% to 92.1 in October from 95.4 in September. The drop was the biggest since April 2025, with the index still remaining below the 100-mark that separates optimism from pessimism.

"At 92.1, the October Index read is now at firmly pessimistic levels, albeit still well above the very weak reads seen during the extended ‘cost-of-living’ crisis," the survey stated.

Westpac said sentiment deteriorated across most categories, reversing the lift seen earlier this year when interest rate cuts briefly boosted morale.

The survey noted that households had become more unsettled by recent signs that inflation may be firming again, raising doubts about how soon the Reserve Bank of Australia (RBA) will resume easing policy.

“Consumers appear to have been rattled by recent updates on inflation,” said Westpac senior economist Matthew Hassan, noting that partial data showed annual inflation returning toward the top of the RBA’s 2–3% target band.

While confidence in personal finances and spending intentions declined, optimism around the housing market continued to strengthen.

The survey also found that concerns about job security remained relatively contained, with most Australians expecting stable employment conditions.

The RBA left its cash rate unchanged at its September meeting and is expected to hold steady again in November, though Westpac noted the timing of future cuts remains uncertain.

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