Australian consumer confidence surged in August, with the Westpac index rising 5.7% mom to 98.5, the strongest reading since early 2022. Westpac attributed the rebound to RBA’s recent rate cuts, noting that a “long period of pessimism” among households may finally be drawing to a close. Consumers are less worried about their finances and more willing to take a cautiously positive view on the economy.
While policy easing is clearly helping, Westpac said the recovery is still fragile. Sustaining gains will likely require further RBA support, though there is no urgency to cut again at the September 29–30 meeting. With inflation well within the target range and unemployment low, the Board has room to wait and respond to incoming data.
On balance, Westpac expects RBA to hold steady in September before delivering another 25bp rate cut in November.
