The Westpac-Melbourne Institute Index of Consumer Sentiment increased by 5.6% in January from 113.8 in December to 120.1 in January, claimed by a Westpac Banking Corp. and Melbourne Institute survey of 1,200 consumers.

Westpac economists emphasised on the fact that index remains above its level of last September prior to the Reserve Bank's record three consecutive rate increases over the three months from October to December, highlighting the confidence of the mortgage holders.

Evans revealed, “Households appear to have comfortably absorbed the higher interest rates”.

Although the categories of the Index are not seasonally altered, however, the economists still regard that it still deserves to be noted that the rise in the confidence of those respondents with a mortgage was up 16.7% in January compared to the average rise in January of 8.6%.

“It is likely that the most important fillip to confidence in the month was the continuation of positives surprises on employment”, Westpac’s Evans said.

The recent figures revealed that the national unemployment rate in Australia witnessed a significant fall from 5.6% to 5.5% in December, creating an additional 35,200 jobs in the month.

Assessment of Family finances cited that it raised by 5.2% compared to the previous year; expectations about family finances "over the next 12 months" increased by 10.5%.

Westpac speculates to witness another rate hike of 0.25% to be announced by the RBA on February 2 which can propel another two increases of 0.25% each by June.