Fears of more gas trouble in pipeline

Positive lift in consumer sentiment

CONSUMER sentiment has improved despite banks increasing interest rates on many mortgage products, but pessimists still outnumber optimists, polling indicates.

The closely-watched Westpac-Melbourne Institute index of consumer sentiment has risen 0.4 points to 96.6 this month, compared last month.

Westpac chief economist Bill Evans said it was the eighth consecutive month reading below 100 points, whereby pessimists outnumber optimists. But he said the lift in the index was a good sign, considering the out-of- with 96.2 cycle interest rate rises announced by a suite of banks.

Banks have increased rates on many investment home loans and interest-only loans, which are more popular with investors, to appease regulators. They have also reduced standard variable interest rates on owner-occupier loans. THE peak body for the chemicals and plastics manufacturing sector says the threat of government export restrictions on gas is yet to provide any relief from surging prices.

Chemistry Australia has also warned a previous estimate of more than 14,000 manufacturing job losses linked to skyrocketing gas prices is likely to be too low.

That modelling was based on a gas price well under that now being offered to major users, the group says.

The grim outlook comes despite the federal government’s Domestic Gas Security Mechanism coming into force last week. The mechanism allows the government to redirect gas bound for international markets to local consumers.

Chief executive Samantha Read said members continued to report they were being hit with price rises of 30 per cent to 60 per cent when they went to negotiate new gas contracts.