Australian Bond Exchange

ABE Weekly: Australian Households under mounting pressure from rising Costs

Australian Bond Exchange Weekly Update

02 April 2026

Market Insights

  • Australian Households under mounting pressure from rising Costs
  • Australian Government halves fuel tax
  • The Middle East stands out as the biggest loser in this energy crisis

Key Points

  • Australia:The RBA increased cash rates by 0.25% to 4.10% p.a. at its March meeting. February CPI decreased slightly to 3.70% p.a., and the Trimmed Mean was 3.30% p.a.
  • United States:The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its February 2026 meeting, signalling one rate cut in 2026. The latest U.S. CPI inflation rate 2.4% (YoY) as of February 2026.
  • United Kingdom: The Bank of England held Bank Rate steady at 3.75% p.a. and CPI for February was unchanged at 3.0% p.a.
  • Eurozone:The European Central Bank kept its key deposit facility rate unchanged at 2.00% p.a., and recent data show inflation in the euro area increased slightly to 1.90% p.a., up from 1.70% in January.

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Australian Households under mounting pressure from rising Costs

NAB’s latest Consumer Stress Index indicates that Australian households face increasing pressure from rising living costs and persistent inflation. The index remains high at 59.1 in the first quarter of 2026, above the long-term average, highlighting elevated stress levels.

The main factor is the cost of living, with concerns reaching their highest point since 2014, driven by stubborn inflation and ongoing price hikes in groceries, utilities, and housing. Notably, the index now surpasses its level during the 2022–2024 period of heightened inflation, suggesting rising consumer inflation expectations, which the Reserve Bank of Australia has recently voiced concern about. Job security and the unemployment rate will be vital in the future, as jobs are currently a key source of household support.

Australian Government Halves Fuel Tax

The government in Canberra will temporarily halve the fuel excise to take some pressure off rising living costs. From 1 April, the tax on petrol and diesel drops from about 52.6 cents to roughly 26 cents per litre for three months, with Prime Minister Anthony Albanese framing it as immediate relief for households and businesses. Drivers should save around 26 cents a litre, or close to $19 on a full tank. The government is also cutting some fuel charges for heavy vehicles to help bring down freight costs.

The Middle East stands out as the biggest loser in this energy crisis

The Middle East stands out as the biggest loser in this energy crisis. What makes this situation so unusual is that the world’s largest energy-exporting region is no longer able to sell oil and gas at normal levels, cutting off a critical source of income. For the Gulf Cooperation Council, exports are estimated to fall by around 75 per cent, a collapse that overwhelms any gains from higher prices. The result is a severe hit to national revenues across the region, where government budgets and economic activity are heavily tied to energy exports.  With export volumes collapsing and revenues plunging, pressure would build for asset sales, especially of liquid holdings like equities and bonds, alongside reduced outward investment.

The ABE team wishes you a safe and happy Easter holiday

*Data accurate as at 02.04.2026

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