The country's consumer shopping mood grew steadily in December despite expected declines due to the Reserve Bank of Australia's (RBA) decision in November to lift its policy rate.

According to the latest Westpac-Melbourne Institute consumer sentiment index released on Wednesday, consumer confidence shored up by 0.2 percent to 111 points in December, coming from the 110.7 points recorded in the previous month.

The firm growth was posted amidst predictions that buyers may hold back on their spending when the RBA moved to break months of pause on rate movements.

Yet it appeared that consumers gained some amount of reassurance when the country's central bank opted to hold off anew on increasing the interest rates in December, according to Westpac chief economist Matthew Hassan.

Hassan added that consumers were further comforted by the fact that the RBA's existing rate policy could be extended into the next few months comprising the first quarter of 2011, prompting for a consumer outlook that is cautiously optimistic.

The December consumer index showed shopping behaviour is still guided by positive indicators but Hassan admitted that the levels seen in the month actually paled in comparison to the upbeat mood that characterised shopper's disposition at the start of 2010.

He concluded that optimism is in the air indeed but this does not automatically mean that major figures would be seen on sales result come accounting time next month as he stressed that while consumers are generally confident on their finances, their spending decisions are still influenced by reservations on the true strength of the Australian economy.

It may be that most consumers are still focused on settling their debts, as suggested in the Westpac-Melbourne survey, which Hassan said could largely keep most buyers from plunging into a spending-splurge mode.

Also noteworthy on the new survey, according to Hassan, was the indication that Australians are turning their attention on the possibility of purchasing a new house, which he said pointed to the positive direction that the housing sector reacted with resiliency on the November rate hike imposed by the RBA.