Consumer confidence has hit a high for the year, as we head into a New Year

The latest Westpac McDermott Miller Consumer Confidence Index rose 5.6 points in the December quarter, to 96.5.

Spending has picked up across the country, in contrast to the past year.

Senior Economist Satish Ranchhod says households do typically feel better at this time of year - but there's good reason for it.

He says the big factor is interest rates, and we haven't seen the full impact yet.