Australians remain gloomy about the economic outlook, but fuel price pressures and fears about a potential interest rate increase moderated, leading to a rise in July sentiment. The Westpac-Melbourne Institute Consumer Sentiment Index rose to 83.9, up from 80.6 in June. While the index improved, pessimists still outweigh optimists and the reading sits among the lowest in the 50-year history of the survey.

The July index shows consumers are less concerned about energy prices, interest rates and employment, with improved assessments of current family finances and higher confidence in household finances in the next 12 months. Despite improvements, housing sentiment remains weak. Expectations for house price growth continues to decline and reached a three-year low, with fewer respondents expecting property values to rise in the next year.