Consumer sentiment has risen, with economists attributing the improvement to a change in views on interest rates, with most people now expecting rates to remain on hold or fall.

The monthly Westpac-Melbourne Institute survey showed a 4.3% rise in confidence in February after it had dipped in January.

Westpac senior economist Matthew Hassan says the improved mood is largely due to a shift in stance on interest rates by the Reserve Bank. Less than 43% of Australians now believe that interest rates will rise over the next year, down from about 50% in August.

“The survey was in the field over the week which saw a significant shift from the RBA, with the Governor giving a clear signal that the bank now has a more evenly-balanced view on the next move on rates, compared to the next-move-likely-to-be-higher assessment that it maintained throughout 2018,” he says.

Hassan says there’s no sign so far in Westpac’s survey price declines in the Sydney and Melbourne housing markets are causing alarm in those regions.

“Confidence continues to bear up well in the face of significant headwinds,” he says.

“In particular, the continued house-price correction, concentrated in Sydney and Melbourne, is impacting consumer expectations for house prices but so far appears to be having only limited spill-over effects on wider confidence.”