The latest data shows the Westpac-Melbourne Institute Consumer Sentiment index rose 0.2% in June compared to the previous month, ahead of market expectations of a flat reading after May’s plunge of 7.9%.

The reading comes after the Reserve Bank’s +0.25% lift of the cash rate to 4.10% in early June when sentiment was for a hold to ensure inflation returns to target. However, the Reserve Bank said while inflation has passed its peak, it remains too high at 7% with an increase in interest rates “providing greater confidence that inflation will return to target in a reasonable timeframe.”