THE NEWS WRAP: Budget surplus key to Australia’s credit rating: S&P

Australia could risk losing its coveted AAA rating if the federal budget does not return to surplus, a leading credit agency has warned.

Kyran Curry, global director of public finance at Standard & Poor’s, told The Australian Financial Review that there won’t be pressure to downgrade ratings unless something “cataclysmic” happens and the budget doesn’t return to surplus.

Consumer confidence lifts

Interest rate cuts appear to be finally filtering down to consumers, with an unexpected rise in confidence ahead of the Christmas trading season.

Westpac’s index of consumer sentiment rose by 5.2% this month, indicating that the 1% reduction in interest rates this year is having an influence on the public.

PayPal launches new retail payment system

Australian retailers have been offered a way to get payments from customers without cash or credit cards, with PayPal rolling out a new point-of-sale technology.

The online payments firm said that its PayPal Here API will allow stores to charge amounts to consumers’ accounts for purchases. Retailers including Sonoma Bakery, Guzman Y Gomez, Glue Store and Crayons have already signed up to the system.

Overnight

The Dow Jones Industrial Average fell by 108 points, or 0.9%, to 12,570.95. The Australian dollar tumbled to US103.81 cents.