"The clear signal from this survey is that the Bank's rate cuts are gaining some traction with households"
- Westpac chief economist Bill Evans
A measure of consumer confidence among Australians increased for the third month in a row in March, as people grew more upbeat about the economic outlook and their own finances, since lower rates improved domestic demand. According to the Westpac-Melbourne Institute, a gauge of consumer sentiment showed a reading of 110.5 in March, 2% higher from the previous month's reading of 108.3. On a yearly basis, the index soared 15.1%. As the reading climbed to the highest level since December 2010, there are now more optimists and they outnumbered pessimists. Last year the Reserve Bank of Australia cut its benchmark interest rate by 125 basis points, reaching all-time record low of 3%. During its last meeting in March, nation's central decided to keep its interest rates unchanged, as the country has already felt the effect of past easing.
"This is a strong result," said Westpac chief economist Bill Evans. "The clear signal from this survey is that the Bank's rate cuts are gaining some traction with households. In recent months we have seen the accumulation of the cuts appearing to be genuinely boosting confidence. Equity markets and the associated signals that global economic prospects are improving is the other key driver of this improved confidence".
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