Consumers still uncertain despite RBA rate hold

The news: The Westpac-Melbourne Institute Consumer Sentiment index dipped further into 'deeply pessimistic territory,' suggesting the Reserve Bank's decision to hold interest rates steady at 4.1% for a second month is yet to boost confidence.

The numbers: The index fell 0.4% to 81 in August from 81.3 in July, when it initially lifted 2.7% on the back of the initial rate pause and improved inflation data. Since then, average fuel prices have surged 17¢ to $1.82/litre, while benchmark maximum energy prices jumped between 20%-25% from July 1, sinking consumer confidence.

The context: Westpac economists expect not only that the RBA will keep rates on hold at 4.1% at its September meeting, but that the current cash rate will prove to be the peak of the rate hiking cycle.