Australian consumers give muted cheer to lower interest rates

Reuters

10-06-2025

SYDNEY, June 10 (Reuters) - A measure of Australian consumer sentiment inched higher in June as a cut in interest rates gave only a limited lift to finances and the economic outlook, though there was a pick up in buying intentions.
A Westpac-Melbourne Institute survey showed on Tuesday its main index of consumer sentiment edged up 0.5% in June, following a 2.2% rise in May.
The index was 10.8% higher than a year earlier at 92.6, though being below 100, that meant pessimists still outnumbered optimists.
The Reserve Bank of Australia cut interest rates by a quarter point to 3.85% in mid-May and sounded open to further easing should inflation continue to slow as expected.
Data out last week underlined the need for stimulus as the economy barely grew in the first quarter as households chose to save more rather than spend, while the government cut back spending after a long run of increases.
"On the positive side, the RBA's May interest rate cut and moderating inflation are providing significant boosts, particularly around buyer attitudes towards major purchases," said Matthew Hassan, Westpac's head of Australian macro-forecasting.
"But against this, more sluggish growth reads domestically and the unsettled situation around global trade are continuing to weigh heavily on expectations."
The survey found respondents were cautious about their personal finances for the year ahead, with the index falling 1.9%, while the economic outlook for the next 12 months slipped 2.4%.
The one bright spot was the index on whether it was a good time to buy a major household item which climbed 7.5%, leaving it almost 26% higher than a year earlier.