Confidence steady despite bank rate rises

Consumer confidence has consolidated just above its long-run average, despite mortgage rate rises from all four big banks.

The ANZ/Roy Morgan weekly consumer confidence index rose just 0.1 per cent last week, after slumping two per cent the previous week.

The result was somewhat surprising given further announcements of increases in variable owner-occupier home loan interest rates last Friday, ANZ’s co-head of Australian economics Felicity Emmett said.

‘Sentiment about current personal finances fell sharply, likely reflecting news of higher mortgage rates,’ she said.

Ms Emmett said that while respondents’ views about their household finances remained fairly solid, the economic outlook remained a concern.

‘For some time, they have been without a positive narrative on the prospects for the economy,’ she said.

But a broadly stable jobless rate over the past year, and hopes that Prime Minister Turnbull can deliver better medium-term economic outcomes appear to have boosted households’ economic outlook.

‘The challenge will be to maintain this upward trend in an environment where the housing market looks to be slowing,’ she said.

Respondents’ views on their finances compared to a year ago was down 4.2 per cent in the week, after a fall of 0.5 per cent the previous week, the survey found.

The reading on whether consumers felt now was a good time to buy a major household item offset these losses, rebounding sharply by 6.7 per cent.

Source: AAP