Feb. 14 (Bloomberg) -- Australian business confidence rose to an eight-month high in January after the central bank cut interest rates twice late last year and concern eased about Europe’s sovereign-debt crisis, a private survey showed.
The confidence index climbed to 4 last month from 3 in December, a National Australia Bank Ltd. survey of more than 400 companies from Jan. 19-Feb. 2 released in Sydney today showed. That was the highest since May. The business conditions gauge, a measure of hiring, sales and profits, rose to 2 from zero.
The Reserve Bank of Australia reduced the benchmark rate by a quarter percentage point on Nov. 1 and again on Dec. 6 as inflation pressures eased. Australia recorded its worst annual job growth in 19 years in 2011 as consumers boosted savings amid concern about potential fallout from fiscal problems in the U.S. and Europe.
“Business confidence was relatively firm in the month, with businesses seemingly still taking relief from the recent RBA rate cuts as well as some abatement of concerns about Europe,” NAB Chief Economist Alan Oster said in a statement. “Nonetheless, labor market conditions remain soft and the overall outlook for near-term activity remains moderate.”
The local currency has risen about 5 percent this year and reached a six-month high of $1.0845 last week after the RBA unexpectedly kept the nation’s benchmark borrowing cost unchanged at 4.25 percent at its Feb. 7 meeting.
--Editors: Brendan Murray, Malcolm Scott
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