Australia's Consumer Sentiment Brightens Amid Interest Rate Stability

Australia's consumer sentiment has brightened for the second month in August, according to a survey by Westpac and the Melbourne Institute. The main index of consumer sentiment rose to 88.9 in August, up 6.0% from July. This increase was largely due to mortgage holders becoming less concerned about further interest rate hikes.

Responses collected between August 10 and 14 showed a marked improvement after the Reserve Bank of Australia held interest rates at 4.35% on August 11. The index for responses after the meeting jumped to 91.1, compared to 83.6 before the decision. Mortgage holders' confidence surged by 16%, while renters' sentiment fell by 2.3%.

Luci Ellis, Westpac's chief economist, noted that while current financial and economic conditions showed solid gains, the outlook remained weaker. The index measuring whether it is a good time to buy a major household item added 8.1% to 93.8, but remains below its long-run average of 123.0.