A pre-Christmas gloom has descended around consumer confidence, which recorded a surprise fall despite the Reserve Bank’s interest rate cut, according to a private survey.

The fall was matched by a drop in personal finance loans by just under 1 per cent in October and a fall of 0.2 per cent in housing finance for owner occupiers, according to Australian Bureau of Statistics (ABS) data released today.

The Westpac Melbourne Institute Index of Consumer Sentiment, which polled 1200 people, fell by 4.1 per cent in December to 100, down from 104.3 in November, a result that Westpac’s chief economist Bill Evans described as ‘‘very surprising’’.

The Westpac survey came a day after the release of National Australia Bank's monthly business survey, which saw business confidence drop to the lowest level in three years as business conditions remained weak with little sign of a pre-Christmas revival.

At the same time, the ABS found that personal finance loans fell by 0.9 per cent in October.

The official figures said personal finance commitments, seasonally-adjusted, fell to $7.34 billion in October, from a downwardly revised $7.41 billion the month before. Total commercial loans in October rose 4.8 per cent to $31.7 billion, seasonally-adjusted, from $30.24 billion in September.

Lease finance was down 6.3 per cent to $543 million, compared with $580 million the previous month. Housing finance for owner occupiers dropped 0.2 per cent to $13.86 billion, from $13.89 billion the month before.

Mr Evans said the lower consumer confidence results strengthened the case for another rate cut in February. 

‘‘Despite another rate cut and improving sentiment towards housing, consumers remain cautious and particularly concerned around the outlook for the economy and for employment,’’ he said.

‘‘Evidence to date is that low rates are not generating much traction with households.’’

In what could be seen as another disappointment for the retail sector during the key Christmas trading season, the sub-index on ‘‘whether now is a good time to purchase a major household item’’ fell by 4.8 per cent.

But the rate cut to 3 per cent, which brought the cash rate down to global financial crisis levels, boosted confidence around future housing purchases, with the index rising by 1.9 per cent. 

Survey participants also responded to the rate cut with a 4.6 per cent rise in their confidence around their finances for the next 12 months, in contrast to a fall of 7.2 per cent in confidence around family finances for the previous year.

Expectations for the economy for the next year fell 4.3 per cent, while expectations for the next five years dropped 8.9 per cent.

The survey also found that the surprise fall in the jobless rate for November - from 5.4 per cent to 5.2 per cent - made a limited impression on respondents.

The breakdown of the survey also showed some odd divergences, with women far gloomier than men. The sentiment index for females fell 10 per cent in the month, while that for men rose by 2.4 per cent.

There was a similar split in responses by voting intention. Sentiment among supporters of the Labor government rose strongly in the month, while that among opposition supporters plunged. 

Bucking the negative sentiment was Roy Morgan's business confidence survey of 2800 companies, which was also released yesterday. It was more positive and showed a lift from 114.0 to 116.8 in November, just off the highest level in 10 months.

with AAP, Reuters