Australian consumer confidence dropped 2.6% to 90.5 in February, marking its third consecutive monthly decline, according to the Westpac-Melbourne Institute index. The reading fell below the 100-point threshold separating optimism from pessimism, reflecting mounting economic anxieties after the Reserve Bank’s latest interest rate hike.

The decline stems from fears about persistent inflation and rising living costs. Households expressed particular concern about potential further mortgage rate increases, with the RBA leaving the door open for additional monetary tightening. Families reported their finances deteriorated at the fastest pace in months.

While sentiment weakened across all survey components, Westpac economist Matthew Hassan noted the February drop was less severe than reactions to previous rate hikes. The long-term economic outlook component recorded its lowest level since mid-2023, suggesting Australians anticipate prolonged financial pressure.

Quick Fact: The consumer sentiment index fell to 90.5 in early February.