Australian consumer confidence improves slightly: survey

13:25, December 15, 2010      

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Australian consumer sentiment has been surprisingly resilient despite a November interest rate rise, a survey showed on Wednesday.

The Westpac-Melbourne Institute Index of Consumer Sentiment rose by 0.2 percent in December to 111.0 from 110.7 in November.

The lift in consumer sentiment followed mortgage rate rises by the banks that were greater than the Reserve Bank of Australia's cash rate lift from 4.5 percent to 4.75 percent on November 2.

Senior economist Matthew Hassan from Westpac, one of the big four Australian banks, said consumer sentiment has shown a " surprisingly resilient reaction to November's interest rate hikes".

"While off the highs recorded in October and the first few months of the year, the Index remains in solidly optimistic territory comfortably above its long run average," Hassan said.

Among the component indexes, the biggest rises in December were in responses to questions on consumers own financial position.

The Index measuring assessments of family finances compared with a year ago rose 4.1 percent, partially reversing the sharp interest rate induced drop in November (10.2 percent).

The Index measuring expectations for finances over the next 12 months also rose 2.7 percent. Both indexes remain close to their long run averages.

The only component to register a fall in December was the index measuring consumer expectations for the economy over the next five years.

The index fell by 7.2 percent to its lowest level since February 2009 and 21 percent below its December 2009 level - the biggest annual fall since the mid-1990s.

The index measuring expectations for finances over the next 12 months rose 2.7 percent.

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