Interest rate hikes have bred consumer caution, says RBA

Australia’s recent interest rate rises have made consumers more cautious in their spending and borrowing behaviour, the Reserve Bank of Australia (RBA) has said.

Speaking at a business luncheon in western Sydney, RBA governor Glenn Stevens noted that many households have become wary about increasing their debt levels in recent months.

"We see at present a certain caution in their behaviour – even though unemployment is low, and measures of confidence have been quite high, consumer spending has seen only modest growth," he said.

"The long downward trend in the saving rate seems to have turned around and I think we are witnessing, at least just now, more caution in borrowing behaviour."

Mr Stevens added that while the direct effects of the European debt crisis would not be large, the Australian economy was not immune to its impact.

Such comments may interest Aussies looking to compare credit cards in search of the most affordable options. This week, Christine Christian, chief executive of credit reporting agency Dun & Bradstreet, told News Limited that Australians should check their personal credit reports at least once a year to improve their chances of securing a loan.

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