The Westpac-Melbourne Institute monthly survey shows consumer confidence rose by 4.3 per cent in November, but is still 22.6 per cent below last year's index level.
"The current level of the index is slightly above three other reads this year, but excluding this current period, is the lowest read of the index since 1992," Westpac chief economist Bill Evans said.
The small rise in confidence was underpinned by 200 basis points worth of interest rate cuts in the past three months and the government's $10.4 billion stimulus package.
"On the other hand households have been unsettled by the ongoing disturbances in financial markets associated with the global credit crisis," Mr Evans said.
The debacle over the government's bank guarantee that resulted in non-guaranteed institutions freeze their assets, falling house and share prices, dwindling superannuation returns and a drop in the Australian dollar would have unnerved households, he said.
In its latest Statement on Monetary Policy the Reserve Bank noted that despite its cash rate falling by 125 basis points to the end of October, the average interest rate on household loans had only fallen by 0.73 per cent.
"The bank is clearly concerned that the distortions arising from the credit crisis are blunting the impact of monetary policy," Mr Evans said.
"That means that rate cuts need to be deeper and rapid.
"With the following board meeting not to be held until February 3 there is a decent chance that the bank will decide to cut again by 0.75 per cent in December."
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