Interest rate cuts boost Australian consumer confidence: survey

Consumer confidence in Australia has risen to its highest level in a year, a new bank survey released on Wednesday revealed.

The Westpac - Melbourne Institute Index of Consumer Sentiment rose 8 percent to 100.7 in February, and it was the first time since February 2014 that the index has read over 100, indicating there were more optimists than pessimists.

Westpac's chief economist Bill Evans said the Reserve Bank of Australia's recent move to cut interest rates to 2.25 percent was a confidence-boosting factor as well as lower fuel prices and a booming stock market.

"The 21 percent fall in average petrol prices over the last two months is the largest two month fall in prices since December 2008, " he said in a statement.

"Similarly, the 9.7 percent rise in the share price index since the January survey is the biggest one month rise in the share market since August 2009."

The report said the confidence of people who had a bank mortgage rose only 0.7 percent despite the interest rate cuts, so other factors have contributed to the better consumer sentiment.

In other figures, there was an increase of 9.7 percent in the proportion of people who say now is a good time to buy a property.

Those surveyed also reported a boost to their household finances compared to a year ago, and were more positive about the economy in 2015. However, consumers were still cautious about spending on big-ticket items, the report said.

The Westpac report expects the RBA to further cut interest rates at its March board meeting.

"The ongoing unease around employment security and likely soft growth in incomes also suggests the rise in confidence will see a more muted impact on spending," Evans said. Endi