The next move in the Reserve Bank of Australia’s cash rate is likely to be down, but the timing remains uncertain, according to the latest NAB Economics RBA Watch.
09 June 2026 | 3 min read
30 March 2026
- Cost of living stress hits a decade high
- Switching providers bolsters spending cutbacks
- Future spending intentions subdued
Australian households are facing the highest cost of living pressure in more than a decade but are responding by actively switching providers and trading down, rather than sharply cutting spending, according to the latest NAB Consumer Sentiment Survey.
NAB’s Consumer Stress Index rose to 59.1 in the March quarter, the highest level since 2014 and above its long run average, driven by rising prices for essentials including groceries, utilities, rent and mortgages.
NAB’s Head of Behavioural and Industry Economics, Dean Pearson, said despite the pressure, consumers are showing greater adaptability than expected.
“Households are clearly under strain, but what’s striking is how proactive people are being,” Mr Pearson said.
“Rather than simply switching spending off, consumers are shopping around, switching providers and making very deliberate decisions to stretch household budgets.”
The survey shows a step change in behaviour, with 57 per cent of Australians switching at least one provider in the past year in response to rising prices.
Supermarkets were the most frequently switched category, underscoring groceries as the frontline of cost of living pressure. Insurance, internet and mobile services, streaming platforms and energy retailers have also seen elevated churn.
Looking to the future, the report finds intended spending subdued. Intentions to buy major household items notably weakened, along with home renovations and holidays.
“Latest intentions suggest that consumers are planning to shift from selective cutbacks in discretionary spending to broad based restraint that now includes essential items, signalling rising financial stress and reduced spending capacity,” Mr Pearson said.
With the survey data pre-dating the war in the Middle East, next quarter’s survey will show how the NAB Consumer Stress Index responds to the impacts of the global energy shock.
“Consumers are coping, but only by making increasingly tough and deliberate trade-offs. It will be interesting to see how they respond to the new challenges being thrown at them,” Mr Pearson said.
“What we do know is that Australians are making pragmatic choices, optimising their budgets, and preparing for what lies ahead.”
Click below to read the full report.
