Investing.com– Australian consumer sentiment hit an over two-year high in early-October, a private survey showed on Tuesday, amid growing confidence that local interest rates will not rise further.
The Westpac-Melbourne Institute consumer sentiment index rose 6.2% to 89.8 in October- its strongest level since early-2022.
While consumers still remained broadly pessimistic, sentiment was buoyed by interest rate cuts abroad, as well as signals from the Reserve Bank of Australia that local interest rates will not rise any further.
Concerns over sticky inflation, however, remained a key point of concern for consumers, as did a tight house market, Westpac said in a note.
Tuesday’s reading shows a marked improvement in sentiment, after anxiety over sticky inflation and high interest rates put sentiment at historic lows in recent months.
A strong labor market, however, remained among the few points of support for sentiment.
Westpac expects the RBA to keep interest rates unchanged for the rest of the year, and also expects the bank to ease its hawkish hold messaging in the coming months.
