The Westpac/Melbourne Institute Index of Consumer Sentiment rose by 1.7 per cent this month from 119.3 in September to 121.4 in October.
The index is 47.9 per cent higher than its value a year ago and a fraction short of its June 2007 high of 121.5.
“This rise (in consumer sentiment) is significant since the survey follows the Reserve Bank’s decision to raise interest rates,” Westpac’s Chief Economist Bill Evans said in a statement today.
“However the result should come as no surprise. Evidence from the last tightening cycle, which began in May 2002, points to sentiment being resilient to rises while rates remain very low.”
The central bank last week took the interest rate 25 basis points higher to 3.25 per cent – its first rate rise in 19 months.