Home topics news Oliver Hume Chief Economist, Matt Bell News News Australians turn grumpy as rate cut hopes flip to hike worries Yajush Gupta December 17, 2025 November’s consumer confidence surge completely reversed in December as rate cut expectations turned to hike fears What’s happening: Consumer sentiment fell 9% in December, completely reversing November’s move into positive territory for the first time in three years. Why this matters: The dramatic reversal demonstrates how vulnerable consumer confidence remains to interest rate signals, even when the economy is performing better than expected. This sensitivity affects spending patterns, property markets and business investment decisions heading into 2025. Australian consumer confidence experienced a dramatic reversal in December, with sentiment plunging back into negative territory after briefly touching its highest level in seven years. Overall sentiment fell 9% to net negative levels, completely erasing November’s surge to the first positive reading in more than three years. The sharp decline highlights just how sensitive Australian households remain to interest rate expectations, even when stronger economic data suggests the nation is performing better than anticipated. Oliver Hume Chief Economist Matt Bell described the swift turnaround in stark terms. “Last month’s big move by the Westpac-Melbourne Institute Consumer Sentiment survey into positive territory was completely reversed in December. Apparently, all we needed was a change in view about rate cuts to rate hikes, and everyone is grumpier. Even when it’s because the economy is running a bit hotter than everyone thought,” Bell said. The sentiment collapse was driven