Consumer confidence dented by rate rise

Consumer confidence fell in December, dented by the Reserve Bank’s decision to lift interest rates for the third time in as many months.

The Westpac-Melbourne Institute index of consumer confidence fell by 3.8 percent in December, and is now down 4.7 percent since September.

The fall has come as a surprise to some economists who were predicting the impact would be much worse.

Commenting on the fall, Westpac chief economist Bill Evans said: “We expected that there was a real possibility that the index would fall much more sharply than the 3.8 per cent registered.”

The Reserve Bank raised the interest rates by a further 25 basis points to 3.75 percent at last week’s monthly board meeting, while most banks raised their standard variable mortgage rate by a greater margin, with Westpac almost doubling that of the rate set down by the central bank.

Consumer confidence fell in December, dented by the Reserve Bank’s decision to lift interest rates for the third time in as many months.

The Westpac-Melbourne Institute index of consumer confidence fell by 3.8 percent in December, and is now down 4.7 percent since September.

The fall has come as a surprise to some economists who were predicting the impact would be much worse.

Commenting on the fall, Westpac chief economist Bill Evans said: “We expected that there was a real possibility that the index would fall much more sharply than the 3.8 percent registered.”

The Reserve Bank raised interest rates by a further 25 basis points to 3.75 percent at last week’s monthly board meeting, while most banks raised their standard variable mortgage rate by a greater margin, with Westpac almost doubling that of the rate set down by the central bank.

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