The Red Book Quarterly Update on the Australian Consumer

Australian consumer sentiment crashed in April 2026 as a geopolitical oil shock and persistent interest rate hikes created a new cost-of-living crisis. Westpac forecasts suggest real incomes will contract this year, significantly dampening spending growth.

Key Takeaways

• 1.Australian consumer sentiment suffered one of its biggest monthly falls on record in April 2026, dropping 12.5% to 80.1 due to a severe energy price shock and rising interest rates.
• 2.A conflict between the US, Israel, and Iran has disrupted 15% of global oil and gas supply, causing a 33% spike in local Australian fuel costs in March.
• 3.The RBA raised the cash rate by 25bps in May 2026, with Westpac forecasting two additional 25bp hikes in the coming months to contain inflation risks.

Table of Contents

• Overview
• Quick run-down
• Consumer mood: shocked
• Early signals from Westpac data
• Historical fuel price surges
• Spending: sharp reversal
• Interest rates: fears realised
• Inflation: here we go again
• Durables: aborted upturn
• Dwellings: watch this space
• House prices: expectations still hot
• Risk aversion: impact still to come
• Job security: sectoral concerns
• State snapshot: Western Australia
• Economic and financial forecasts
• Consumer data and forecasts

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