Consumer confidence in Australia skidded to a five-month low as family finances became tighter due to rising mortgage fees, following the interest rate adjustments early this month.

According to a Westpac Banking Corp. and Melbourne Institute survey of 1,200 consumers, consumer sentiment declined by 5.3 percent to 110.7 this month. The survey was conducted during Nov. 1-7 and released today in Sydney.

Among the five components of the survey, the measure gauging family finances went down by 10. 2 percent. Westpac's chief economist Mr. Bill Evans explained that the mining industry growth maybe good to the economy but it has not propped up the financial position of households.

Mr. Evans also noted in a related report of Bloomberg news that "the general mood of consumers for the forthcoming holidays is not particularly upbeat."

The survey was conducted within the period that the RBA's decision to increase the cash rate from 4.5 per cent to 4.75 per cent was implemented.

'Surprisingly Resilient'

Mr. Evans also cited that they actually expect consumer confidence to be lower, but the relative strength of the Australian dollar has given consumers a little push to be optimistic.

It was a welcome surprise that opinions on "whether it is a good time to buy a major household item" fell slightly by 1.9 percent.

This fall followed a 9.9 percent increase in September.

Dr. Evans stated that mortgage borrowers are also uncertain of the rates to be observed by three major banks after the Commonwealth Bank of Australia imposed higher interest rates immediately after the RBA.

"Consequently, this surprisingly resilient result might be affected by confusion on the part of mortgage borrowers. Once the other major banks clarify their policies, which will presumably be before the next survey in early December, there may be a follow up response from households," he added.