Australia's economic growth is still tracking below trend, but momentum is expected to pick up soon.
The Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 4.1 per cent in July, above its long term trend of 2.9 per cent.
But the coincident index, which gives a pulse of current conditions, was below its long term trend of 2.9 per cent, coming in at 2.4 per cent.
Westpac chief economist Bill Evans said the index pointed to a stronger growth outlook than was forecast by Westpac economists, who expect below-trend growth throughout 2014.
"Current activity is tracking below trend consistent with the current overall soft economic conditions," Mr Evans said.
"The Reserve Bank board next meets on October 1 and markets have moved to largely price out any more rate cuts.
"We believe that has been substantially motivated by developments offshore and is not consistent with the signals from the RBA."
Mr Evans said the minutes from the RBA's September meeting, released on Tuesday, supported the view that rates would remain on hold again in October.
"But by the time of the November meeting, the board will be able to assess whether business and consumer confidence hold up following the exuberant reaction to the election result, more information around the Australian dollar, more data around the labour market and of course the September quarter inflation figures."
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