Rate cuts not enough to boost confidence levels

Falling interest rates and improved employment statistics have not been enough to lift the gloom across Australia, it seems.

According to Westpac's latest research, confidence levels among Aussie households have only crept up by a modest one per cent this month.

With the Reserve Bank of Australia trimming the national cash rate to a three-year low of 3.25 per cent and positive economic developments in the US and Europe, the company had expected Aussies to be a little more optimistic about their financial situation.

However, it appears the major banks' reluctance to pass on these cuts has knocked people's confidence and a lot of Aussies who have mortgages and personal loans must continue to watch every penny they spend.

"It is of some concern that the Consumer Sentiment Index is still significantly below its level of last November following the first 25 basis point cut in the overnight cash rate," the Westpac report stated.

Although rates have fallen by 150 points since November 2011, there is still a chance that another reduction will come before the end of 2012.

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