Consumer Confidence Falls But Overall Prospects Good

Consumer Confidence has fallen but remains high following the recent Federal election, according to the Sydney Morning Herald.

Consumer sentiment fell by 2.1% in October, following a 4.7% increase in September.

This follows a second consecutive month of improved business confidence according to the National Australia Bank.

Consumer sentiment is currently 2.5% above August levels and 9.2% above the level 12 months ago.

Bond fund, PIMCO, said the Reserve Bank is likely to lower rates again to compensate for the ongoing fall in mining investment. It expects continuing sluggish growth in Australia until the mining sector settles into a new growth phase.

Economists from Citi predict the Reserve Bank will keep rates at their current level and wait for a significant improvement in consumer sentiment in the months ahead before taking action.

HSBC economists said consumer sentiment research indicates that growth outside the mining sector now seems to be spreading beyond the housing market.