Last week’s Roy Morgan Consumer Confidence survey showed a strong rise, following the same trend as the Westpac/Melbourne Institute Index of Consumer Sentiment.

It was the second consecutive rise after the November interest rate hike and follows last week’s strong jobs figure. Throw in the falling oil price and you have continued pressure on interest rates.

We’ve already seen four rate rises since the John Howard was returned in 2004 after asking “Who do you trust to keep interest rates low?” That “low” has become “lower” as rates have risen a full percentage point. And yet another survey is pointing to more pain.

The TD Securities-Melbourne Institute monthly inflation gauge rose 0.3% last month, following a 0.2% rise in November. Their chief economist, Stephen Koukoulas, warns that inflation remains stubbornly high, making a compelling case for another interest rate rise.

All eyes will now be on official interest rate figures due next week.

Peter Fray

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