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Australian consumers keep their nerve in the face of Brexit turmoil

Published 28/06/2016, 09:30 am
© Reuters.  Australian consumers keep their nerve in the face of Brexit turmoil

SYDNEY, June 28 (Reuters) - Australian consumers are putting a brave face on the market turmoil and global uncertainty that followed the UK's vote to leave the European Union, with a survey showing a surprisingly slight pullback in confidence last weekend.

The poll of 1,000 people from Australia and New Zealand Bank and Roy Morgan showed its index of consumer sentiment had dipped 1.7 percent, but that only partly retraced a 2.1 percent jump the previous week which took it to the highest since Nov. 2013.

"The strength in confidence reflects the solid momentum in Australia's economy," said ANZ economist Giulia Lavinia Specchia.

"The improvement in the labour market is likely to be a key factor, in addition to low interest rates and the ongoing strength in the housing market which are supporting households' healthy assessment of their own finances."

Indeed, respondents were actually more upbeat about the outlook for family finances over the next year, perhaps reflecting speculation the Reserve Bank of Australia (RBA) might further cut interest rates in coming months.

The central bank holds its July policy meeting next week, though most analysts see August as a more likely window for a cut in the current 1.75 percent cash rate.

The survey did find a dip in confidence about the economic outlook, but that was from relatively high levels.

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