Australian consumer sentiment improved 6% to 88.9 in August, following the RBA’s decision to hold interest rates. The strongest improvement was among mortgage holders. However, sentiment remains firmly pessimistic and below last year’s levels, with ongoing economic and geopolitical uncertainty weighing on consumers.

Unemployment expectations increased above their long-run average, while house price expectations weakened as the housing market softened. Although fewer consumers were uncertain about the outlook for interest rates after the RBA decision, 59% still expect mortgage rates to rise further, indicating continued caution among households.