Outgoing RBA governor Philip Lowe will on Tuesday helm his last meeting of the board, which is widely expected to keep the official cash rate at 4.1 per cent.
Households have continued to pull back on spending for non-essentials as inflation and interest rates bite.AMP deputy chief economist Diana Mousina said there was no solid reason for the Reserve Bank to raise the cash rate on Tuesday after holding it steady for the past two months.
“There is no argument right now that could push you towards another rate hike if the Reserve has already been on hold for two months, so I think the chance of a hike tomorrow is pretty low.”from the December peak of 8.4 per cent, down to 4.9 per cent in July. Household spending was 0.7 per cent lower in July, compared to July last year, according to ABS figures.ABS head of business statistics Robert Ewing said the spending indicator’s fall was its first since February 2021 as households cut spending in the face of higher rates and inflation.
The recent fall was driven by a drop in spending on furnishings and household equipment , clothing and footwear and recreation and culture .Services spending rose by 2.4 per cent over the year, driven in part by an increase in spending on health services, which were up by 6 per cent.
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