Australian consumer confidence fell in November for the first time since May, the mood soured by rising interest rates and a higher gasoline prices. But Bill Evans, chief economist at Westpac, said the fall in sentiment was modest given that it follows consecutive interest rate increase.
Consumer sentiment fell 2.5% in November from October, according to a monthly survey by Westpac Bank and the Melbourne Institute of 1,200 households.Evans said the RBA is likely to continue raising interest rates at its Dec. 1 policy meeting as it continues to remove emergency interest rate settings. However, the RBA may pause soon into next year to assess the impact of its hikes, he added.
"Confidence is still at remarkably high levels and the bank is likely to take the opportunity to gradually remove more of the stimulus," he said. "Today's results do, however, signal that the extent of rate hikes in 2010 envisaged by current market pricing is unlikely to transpire", Evans added.