The Westpac–Melbourne Institute Leading Economic Index was unchanged month-on-month in August, matching the result in July. However, its six-month annualised growth rate edged up to -0.09% from -0.17% in the previous month. While momentum remains subdued, it has firmed since mid-year, with the index now only slightly below trend heading into late 2026 and early 2027.
Second-quarter GDP data indicate that the Australian economy is holding up better than expected despite the global energy shock and higher interest rates. Activity appears to be stabilising at a modest pace rather than stalling, supported by resilient household spending and a strong acceleration in data-centre investment.
Westpac expects the RBA to raise rates again but, overall, anticipates that it will wait for the next comprehensive quarterly inflation report on October 28. Accordingly, the September meeting is likely to result in a “very hawkish hold.”
