Australian increasingly confident about economic outlook

14:09, August 11, 2010      

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Australians have been increasingly confident about the economic outlook following the Reserve Bank of Australia's (RBA's) decision to halt its series of interest rate rises, survey showed on Wednesday.

The latest Westpac-Melbourne Institute Index of Consumer Sentiment figures reveal a 5.4 percent jump in the past month to levels last seen before the RBA started raising rates in October last year.

The biggest jump in sentiment was on the question of the economic outlook for the next 12 months, which rose 8.6 percent to 127.1. A figure above 100 showed optimists outnumber pessimists.

Westpac's chief economist, Bill Evans said the figures, the first released during the election campaign, were stronger than expected.

"After tumbling by 15 percent in the wake of three consecutive rate hikes in March, April and May, the index has now recovered by 17 percent in the last two months," Evans said in a statement.

"It is now back to around the level it reached at the beginning of this year and the level we saw prior to the beginning of the rate hike cycle in September last year."

Evans said the Reserve Bank's decision to keep rates on hold in August was the main boost to confidence.

"There were many reasons to expect the index to rise in August although a 5.4 percent increase following the 11.1 percent increase last month is much larger than we expected.

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