After a rough year economically, predictions 2026 will be a smoother ride for households and businesses

Westpac's October Economic Overview expects affordability will improve next year, as price inflation for food and other goods slows down.

It also predicts business confidence will bounce back - leading to a three-percent growth in GDP.

But Westpac Chief Economist Kelly Eckhold says unemployment will slightly increase from this point.

But he says it will decrease halfway through next year with greater economic growth.