SYDNEY, March 11, 2026, 09:05 AEDT
Westpac Banking Corporation said on Tuesday Australian consumer sentiment edged up in March, but the gain masked a sharp loss of confidence later in the survey week as the Middle East conflict worsened. The Westpac-Melbourne Institute index rose 1.2% to 91.6, though late responses implied a reading closer to 84; any result below 100 means pessimists outnumber optimists. 1
That matters now for Westpac because management said only weeks ago that demand for household and business credit should stay resilient after the lender beat first-quarter profit estimates. Westpac reported A$1.9 billion in unaudited net profit for the December quarter, helped by A$12 billion in deposits and A$22 billion in new loans, and its shares touched a record high after the update. 2
Westpac economist Matthew Hassan wrote that consumers were still showing only a “relatively mild negative reaction” to February’s rate rise, but the mood was turning more nervous as the week went on. He said the escalating conflict in the Middle East was starting to unsettle Australians. 3
Under the surface, the survey was uneven. Westpac’s measure of whether it was a good time to buy a major household item rose 4.9% to 98, and the family finances gauge improved to 80.2, but the measure for the economy over the next year fell 2.9% to 85.9 and the unemployment expectations index — where a higher reading means more people expect joblessness to rise — climbed 3.8% to 134.7.
A rival reading from ANZ and Roy Morgan released on Tuesday was weaker again. Their weekly consumer confidence measure fell 3.7 points to 73.4, and ANZ economist Madeline Dunk said the series had dropped to its weakest level since July 2023, led by a sharp deterioration in households’ views of their finances over the next year. 4
The Reserve Bank of Australia lifted the cash rate — the country’s benchmark interest rate — by a quarter percentage point to 3.85% in February. Its next monetary policy meeting is scheduled for March 16-17, keeping focus on the big banks as investors wait to see whether softer household mood translates into weaker borrowing. 5
Housing remains another weak spot for Westpac. In a separate report on Tuesday, the bank said 26% of first-home buyers see a lack of listings as a barrier and 39% cited competition from other buyers, with consumer chief Carolyn McCann calling supply “one of our most urgent priorities.” 6
But the small lift in March sentiment could fade quickly. ANZ-Roy Morgan said inflation expectations jumped to 6.1%, while the RBA said in February inflation was likely to stay above its 2%-3% target band for some time; if higher fuel costs deepen that squeeze, household spending and loan demand could come under fresh pressure. 7
