The Westpac–Melbourne Institute Leading Economic Index slipped 0.1% month-on-month in February 2026, after being unchanged in January. The six-month annualised growth rate — which signals the expected pace of economic activity relative to trend over the next three to nine months — held steady at 0.08%. While still slightly above average, this is down from the more clearly positive readings recorded late last year and suggests momentum in early 2026 remains modest and is likely to soften further as the impact of the central bank’s latest interest rate increase flows through. “... we start to see the fuller effects from conflict in the Middle East,” said Westpac economist Matthew Hassan, who added that another 25bp rate hike is likely at the May meeting.