Consumer confidence has slipped for the first time in five months as a result of recent interest rate hikes, a new survey has found.
The latest Westpac-Melbourne Institute consumer confidence survey, taken in the same week that the Reserve Bank raised interest rates, has found that consumer confidence slipped 2.5 percent in November, but is still 38.3 percent above its level from a year ago.
Westpac’s chief economist Bill Evans said the fall was a mild reaction to two interest rate rises in a row.
“Given that this fall comes after a second consecutive increase in the Reserve Bank’s overnight cash rate and associated increases in variable mortgage rates it has to be classified as a modest response,” he noted in the report.
The survey also recorded its largest fall in household expectations of future economic conditions, with expectations of family finances over the next year slipping four percent. Expectations of the economy’s performance over the next 12 months also fell 2.5 percent, while the five year outlook fell 3.7 percent.