Consumers turn cheery

  • Business
  • Thursday, 16 Oct 2003

SYDNEY: Australian consumer sentiment has risen to its highest level in nine years, despite expectations that the Reserve Bank is set to embark on a tightening cycle, possibly by year's end, a leading survey showed yesterday. 

The Westpac Melbourne Institute index of consumer sentiment rose 1.5% in October, and is now 14.7% higher than a year ago and at its highest level since July 1994. 

“The strength of consumer sentiment will provide further clear evidence to the Reserve Bank that interest rates need to rise,” said Bill Evans, Westpac’s global head of economics. Evans sees the possibility of a rate tightening in December. 

While confidence among mortgagees fell 1.5% on concerns over future higher loan repayments, households appear buoyed by rising house prices and a strengthening Australian dollar. – Reuters  

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