Rate cut fails to spark confidence

Retreating consumer confidence is not the reaction Glenn Stevens would have hoped for when he made his first interest rate cut in 18 months.

Economists believe the uncertainty surrounding the future of Prime Minister Tony Abbott and his senior ministers is standing in the way of a positive response.

"Consumer confidence continues to show a disappointing lack of momentum," ANZ chief economist Warren Hogan lamented on Tuesday.

He was referring to the ANZ-Roy Morgan gauge of consumer confidence, which has eased 0.6 per cent in the past week, remaining below its long-term trend.

The day after Mr Abbott avoided a Liberal leadership spill, he was again having to back his treasurer, Joe Hockey.

Questions have been raised about Mr Hockey's future after his poorly received first budget, which still has some of its measures held up in the Senate.

"I have full confidence in the treasurer. I have full confidence in my team," Mr Abbott told parliament on Tuesday, repeating his quote from the day before.

"Why wouldn't our nation have full confidence in a treasurer ... who is delivering for the people of Australia?"

The muted response to the RBA's rate cut to a record-low 2.25 per cent came despite other figures showing house prices in the nation's capitals grew by a further 6.8 per cent in the past year, led by a 12.2 per cent increase in Sydney.

Another report supports the reasoning behind the RBA's rate reduction and the possibility of another cut in the months ahead.

The National Australia Bank's monthly business survey showed conditions increasingly below their long-run average in January and while confidence edged up, it also remained below average.

NAB economists said the survey painted a story of a soft economy - with rising unemployment - that was in need of a boost.

The survey was taken before last week's interest rate cut.

"Our view is that the RBA will sit back and watch for a few months to see if more needs to be done," the NAB said.