Falling fuel prices and a firming housing market have helped lift consumer confidence in the run-up to Christmas.

In the latest survey from Westpac McDermott Miller, consumer confidence rose from 103.5 points in the September quarter to 109.1 points in the December quarter, as consumers expressed optimism about both the economy and their own financial situation.

Gains in confidence were spread across regions, age brackets and income groups, reversing the sharp drop in confidence last quarter.

Economists attributed the gains to a number of factors, including falling petrol prices, which dropped from $2.40/litre at the time of the previous index to the current price of around $2.07/litre.

Falling mortgage rates, along with a related firming housing market in some regions, also played a role in putting consumers in the mood to spend heading into the Christmas season.

The number of households who think now is a good time to make a major purchase rose strongly in the December quarter to 27.3 points, the highest level in four years. And a growing number of households are increasing their spending on entertainment and eating out.

Consistent with this lift in spending appetites, the survey found consumers are feeling more confident about their own financial situation and the outlook for the economy more generally over the coming year. However, there is still some nervousness about the economy’s longer-term trajectory.