Consumer confidence crept upwards in October as a result of RBA rate reductions and the government’s stimulus package but still remains well below 2007 levels, according to yesterday’s Westpac-Melbourne Institute Index of Consumer Sentiment.
The Index, which rose by 4.3 per cent this month, is 22.6 per cent below the index’s level at the same time last year and 14.5 index points under the crucial level where optimists and pessimists are equal.
Mortgage holders’ confidence also improved only slightly by 2.9 per cent despite the dramatic fall in mortgage rates.
Given the results and the fact that the RBA does not meet in January, Bill Evans, Westpac chief economist, said there was a “decent chance” that rates would be cut by another 0.75 per cent in December.
NAB is also predicting a 0.75 per cent rate cut next month.
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