 Consumer confidence did not drop much despite interest hike
Interest rate hike in mortgage did not fully slump the confidence of consumers as data show confidence fell just a bit.
The Westpac-Melbourne Institute consumer sentiment index reported that confidence dropped by just 1.0 per cent this month.
While two month period data shows that sentiment index fell by only 0.8 per cent despite that the average standard variable mortgage rate increased by 1 per cent.
"This is a surprisingly strong result," Westpac chief economist Bill Evans said. "Despite a second consecutive increase in the standard variable mortgage rate of 0.25 per cent in the April, the index has hardly moved."
According to Evans this rate increases did not crash the confidence of Australian consumers.
The survey data revealed that confidence among tenants weakened by only 3.8 per cent while house owners are the ones whose confidence are much affected, failing by 1.0 per cent. On the other hand, confidence of those who have mortgages went up by 0.2 per cent.
The Reserve Bank of Australia is more concerned about the impact of the resources boom and rising home prices above anything else after the cash rate hike, according to Evans. "There is also a clear message that the bank has a specific plan to return rates to average levels," he said.
Among other factors, employment, commodity prices, house prices and business confidence affect the confidence index of consumers.
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