ANZ-Roy Morgan Consumer Confidence surged by 4.7 points to reach 89.8 this week following the Reserve Bank of Australia’s (RBA) decision last week to reduce interest rates by 0.25% to 4.1%.

This was the first rate cut by the central bank in over four years, the last one being in November 2020 during the height of the COVID-19 pandemic.

As a result, consumer confidence in Australia is now 6.6 points higher than the same week last year and 2.7 points above the 2025 weekly average of 87.1.

Confidence improved across all states, with the biggest rise seen in Western Australia, while other states saw increases of at least three points.

Some 22% of Australians, up 2 percentage points, report that their families are financially “better off” compared to this time last year, while 44%, a fall of 6 percentage points, say they are “worse off.” This is the lowest figure for this indicator in two years, since January 2023.

In addition, expectations for personal finances over the next year saw a notable improvement this week, with 37% of respondents, a rise of 5 percentage points, expecting their family will be “better off” financially this time next year - the highest level for this indicator in over three years, since January 2022.

Meanwhile, 27%, a fall of 4 percentage points, expect to be “worse off,” marking the lowest figure for this indicator in nearly three years.

Furthermore, net sentiment in relation to Australia’s economy over the longer term saw a slight improvement this week, with 13%, up 1 percentage point, of Australians anticipating “good times” for the economy in the next five years, compared to 17%, a drop of 1 percentage point, expecting “bad times.”

In addition, there was almost no change in net buying intentions this week, with 24% (unchanged) of Australians believing it's a “good time to buy” major household items, while 44%, a decline of 1 percentage point, feel it's a “bad time to buy” such items.

ANZ economist Sophia Angala noted that the drop also followed strong employment data from last week. According to the Australian Bureau of Statistics (ABS), the seasonally adjusted unemployment rate increased by 0.1 percentage point to 4.1% in January.

“Across the housing cohorts, confidence amongst mortgage holders jumped 10.7pts to its highest level since early May 2022 (before the beginning of the RBA’s hiking cycle) and is now sitting above the confidence of outright homeowners, which remained largely steady last week. Meanwhile, the confidence of renters also rose 4.0pts, but remains the lowest of the three housing cohorts,” Angala commented.

“We expect a gradual uptrend in ANZ-Roy Morgan Australian Consumer Confidence this year, as tax cuts, easing inflation and the RBA’s easing cycle support household disposable incomes,” she added.