As more retailers report a downturn in their sales result, it is evident the consumer sentiment plays some role in it as it is down 3.5 per cent in August.

The Westpac-Melbourne Institute index of consumer sentiment fell from 92.8 in July to 89.6 in August.

Westpac chief economist Bill Evans says after a fall of 8.3 per cent in July, the index is now at its lowest level since May 2009.

“As expected, this financial turmoil has added another dimension of risk to consumers over and above those issues associated with interest rates; house prices; carbon tax; and potentially, jobs,” he said.

“The modest fall in Sentiment despite the Reserve Bank holding rates steady at its recent meeting (until recently) a surging Australian dollar and coming after an 8.3 per cent fall from already low levels clearly points to the consumer remaining cautious.”

Evans also noted that the Reserve Bank of Australia would begin easing interest rates, most likely in December with a drop from 4.75 per cent to 4.5 per cent.

"Despite extraordinary fluctuations in market pricing, we are comfortable to maintain that view while recognising that a continuation of the global market uncertainty could force the RBA's hand to cut rates a little earlier than our original December target," he said.