Aussie Households Remain Pessimistic Despite Slight Confidence Boost

Australian household confidence has seen a weak rise in August after the Reserve Bank held interest rates, but pessimists still outnumber optimists. According to the Westpac-Melbourne Institute monthly consumer sentiment index, the reading rose 6 per cent to 88.9 in August. However, Australians remain deeply pessimistic about their current finances and the future of the Australian economy, with 100 being a pass mark.

Westpac chief economist Luci Ellis said that consumers are feeling less pessimistic than last month but still have a long way to go. She noted that while the mood improved immediately after the RBA's announcement to keep the official cash rate on hold at 4.35 per cent, Australians are still feeling the pinch when it comes to cost-of-living pressures.

The RBA governor Michele Bullock warned that there could be further rate hikes as it focuses on ensuring high inflation, currently at 3.8 per cent, does not become embedded. The Reserve Bank will next meet on September 28-29, and it is largely predicted to hold rates due to the weak labour market and a restrictive level of interest rates.