The Reserve Bank of Australia’s (RBA) decision to raise interest rates in this month has failed to dent consumer confidence, a report says.

The Westpac-Melbourne Institute consumer sentiment index rose 0.3 index points in March to 117.3 points, an increase of 0.2 per cent.

The RBA lifted the cash rate 25 basis points to 4.0 per cent, from 3.75 per cent, at its March board last week.

It was the fourth rate hike since October last year.

Westpac chief economist Bill Evans said it was a “solid result given he backdrop of an official rate rise”.
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Australian economic growth is expected to accelerate this year to levels last experienced at the peak of the resources boom in 2007, according to a leading private sector index.

The Westpac-Melbourne Institute leading index of economic activity, which indicates the likely pace of activity three to nine months into the future, posted an annualised growth rate of 6.2 per cent in December.

The result, released on Wednesday, was above the long-term trend growth rate of 2.7 per cent.

Westpac senior economist Matthew Hassan said the annualised growth rate of the leading index continued to recover after bottoming at minus 6.9 per cent in May 2009.

“This large swing is not only the fastest reversal since the economy bounced out of recession in the mid 1970s but also puts the growth outlook back on a par with that seen in 2007 at the height of Australia’s resources boom,” Mr Hassan said in a statement.
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A surprising fall in consumer confidence this month shows households are still worried interest rates will rise despite the central bank holding rates steady in February, a survey says.

The Westpac-Melbourne Institute index of consumer sentiment fell 2.6 per cent to 117.0 points in February, from 120.1 in January.

However, the number of optimists in the survey still outweighed the pessimists.

Westpac chief economist Bill Evans said the fall was “a little surprising” after the Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.75 per cent on February 2.

Most market economists had expected a quarter of a percentage point rise to 4.0 per cent.
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Consumer confidence fell in February amid householder concerns about future increases to interest rates, a survey shows.

The Westpac-Melbourne Institute index of consumer sentiment fell 2.6 per cent to 117.0 points in February, from 120.1 in January.

Westpac chief economist Bill Evans said the fall was a “little surprising” after the central bank’s decision to hold rates in February.

The Reserve Bank of Australia (RBA) stunned financial markets by leaving the overnight cash rate unchanged at 3.75 per cent on February 2.

Most market economists expected a quarter of a percentage point rise to 4.0 per cent.
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Consumer confidence surged in January as households appear to have absorbed three interest rate rises, a survey shows.

The Westpac-Melbourne Institute index of consumer sentiment increased by 5.6 per cent to 120.1 points in January, from 113.8 in December.

The strong result posted on Wednesday follows slides in December and November.

Westpac chief economist Bill Evans described it was a “very strong result”.

He said the seasonally adjusted index took into account traditional January optimism.
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Westpac Banking Corporation has hiked its standard variable lending rate by almost double the amount of the central bank’s increase, shining a spotlight on the burgeoning pricing power of the major banks.

Australia’s second biggest home loan lender on Tuesday delivered a bigger than expected interest rate rise, announcing it will increase its standard variable home loan rate by 45 basis points to 6.76 per cent.

After the 45 basis point increase, repayments on a $250,000 mortgage would increase by about $71 a month, Westpac said.

The bank will also raise the interest rate it pays its online savings customers 45 basis points while interest rates on business loans will rise by 25 basis points.

Credit card interest rates will increase by between 25 and 35 basis points, Westpac says.
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A key pointer to future economic activity is indicating a sharp acceleration in growth next year, and a recovery that will outstrip official forecasts.

The annualised growth rate of the Westpac-Melbourne Institute leading index was 5.8 per cent in September, well above its long-term trend of 3.1 per cent.

The index, which indicates the likely pace of economic activity three to nine months ahead, has now accelerated from minus 5.4 per cent in May, marking the fastest turnaround since the economy bounced out of recession in the mid-1970s.

“This read represents an extraordinary pace of recovery,” Westpac chief economist Bill Evans said releasing the data on Wednesday.
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It would appear consumers are already getting twitchy about rising interest rates, despite government assurances that households would understand why they can’t stay low forever.

Or perhaps they do understand; they’re just not overjoyed about it.

Consumer sentiment for November fell 2.5 per cent in the latest reading released this week, following up this month’s second interest rate rise by the Reserve Bank of Australia (RBA).

The Westpac-Melbourne Institute consumer sentiment index had risen in the five previous months and, at 118.3 points, the index is still 38.3 per cent higher than a year earlier.

Together, the October and November sentiment readings - coinciding with the RBA’s latest policy changes - have seen the index fall 0.8 per cent.
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A leading pointer to future economic growth suggests a strong recovery in 2010, fuelling the need for higher interest rates in coming months.

The annualised growth rate of the Westpac-Melbourne Institute leading index was 1.7 per cent in August, recovering to just below its long-term trend of 2.8 per cent.

The index, which indicates the likely pace of economic activity three to nine months into the future, has rebounded sharply from the reading of minus 6.9 per cent in May.

“The pace of recovery in the growth rate of the leading index has been remarkable,” Westpac chief economist Bill Evans said when releasing the data on Wednesday.
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Economic growth in the second half of 2009 will be `tepid’, but looks set for a brighter future in 2010, a private sector survey has found.

The annualised growth rate of the Westpac-Melbourne Institute leading index of economic activity, which indicates the likely pace of activity three to nine months in the future, was minus-1.8 per cent in July.

That was an improvement from the reading of minus-3.3 per cent in June and minus-seven per cent in May.

But the index remains well below its long term trend of 2.5 per cent, the survey released on Wednesday found.
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Economic growth is likely to be tepid through the second half of 2009 before improving next year, a leading indicator of economic growth suggests.

The annualised growth rate of the Westpac-Melbourne Institute leading index declined 1.8 per cent in July, remaining well below its positive long-term trend of 2.5 per cent.

However, the index, which predicts the likely path of growth six to nine months into the future, has recovered from a negative reading of 7.0 per cent in May.

“The weak reads in the middle of 2009 are broadly consistent with our view that growth in the second half of 2009 will be tepid,” Westpac chief economist Bills Evans said in releasing the index.
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A measure of economic growth improved slightly in May, suggesting the worst of the downturn in Australian may be over, a report says.

The annualised growth rate of the Westpac-Melbourne Institute leading index of economic activity was minus-3.9 per cent in May.

This was a slight improvement in the index, which predicts the likely pace of economic activity three to nine months in the future, from a reading of minus-4.1 per cent in the previous month.

The rate has been edging higher for the past three months.
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It’s party time, apparently.

Looking at this week’s extraordinary rise in consumer confidence would make you think we didn’t have a care in the world, and all this recession nonsense is somewhere over there.

Definitely not our problem.

Even if the Westpac-Melbourne Institute survey was taken this coming weekend, rather than the one just gone, there is little to suggest the upbeat mood would be any different, given the run of data.

Unless of course you are on the minimum wage, in the wake of the Australian Fair Pay Commission’s decision to award a big fat zero in the latest pay round.

The jobless rate did rise to a six-year high of 5.8 per cent.
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Australia may yet suffer a recession, but it is unlikely to be a deep or prolonged affair.

New data released on Wednesday suggested the economy may record two consecutive quarters of negative growth - the definition of a technical recession - in the June and September quarters, before shifting into recovery next year.

The annualised growth rate of the Westpac-Melbourne Institute leading index released on Wednesday showed a negative 3.5 per cent reading in April, well below its long-term positive trend of 2.8 per cent.

However, the index, which indicates the likely pace of economic activity three to nine months into the future, is showing a significant improvement from the contractions of 5.1 per cent in March and the 6.1 per cent in February, being the lowest since 1982.
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The Australian economy appears to be strengthening, with its annual pace of contraction forecast in April not as severe as in previous months, a survey says.

The Westpac/Melbourne Institute leading index of economic activity rose by 0.7 per cent in April and was down 3.5 per cent over the year, according to the survey released on Wednesday.

The annualised result follows readings of minus 5.1 per cent in March and minus 6.1 per cent in February.

But the index, which indicates the likely rate of economic activity three to nine months into the future, remains below the long-term trend growth rate of three per cent.
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