(Bloomberg) — Australia’s consumer sentiment rose in November while business confidence jumped to the highest level since early 2023, reflecting ebbing inflation pressures that suggest the next move in interest rates will be a reduction.

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A National Australia Bank Ltd. survey showed Tuesday that business confidence climbed 7 points in October after hovering around 0 for an extended period. Conditions, which measure jobs, sales and profitability, remained unchanged.

“While it’s just one month this is an encouraging sign alongside a tentative improvement in forward orders,” said Gareth Spence, head of Australian economics at NAB. “We continue to watch the survey closely – not just for the forward looking and activity indicators, but also capacity utilization which will be key in the evolution in price pressures for the economy.”

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The confidence across corporate Australia extended to households, with consumer sentiment climbing 5.3% to 94.6 points, a Westpac Banking Corp. survey showed Tuesday. The index is now up 14.4% from its mid-year lows and closing in on the 100 dividing line between pessimists and optimists.

The data indicate that business and household sentiment are now converging after moving on different tracks for the past two years. This reflects easing worries about further rate increases by the Reserve Bank and greater confidence in the economic outlook.

The consumer survey was carried over the week ending Nov. 9, providing an insight into reactions to both the RBA’s policy decision, where it left the key rate at a 13-year high of 4.35%, and the US election result.

The details showed that consumer sentiment was “markedly higher” at the start of the week with an index reading of 99.7 but posted a sharp fall following Donald Trump’s election victory.

“Whether the strong start, or weaker finish to the week are a better guide depends on how lasting the post-US election drop is expected to be,” said Matthew Hassan, a senior economist at Westpac. “That said, the mood does look to be improving and is providing some more positive signs for retailers ahead of the all-important Christmas high season.”

Household sentiment has been in the doldrums in the post-pandemic period as a surge in inflation prompted the RBA to raise rates; the central bank has pointed to persistent price pressures to justify keeping them elevated even as global counterparts ease.

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