Flat Spending in Australia Fuels Rate Hike Speculation

Australian household spending was flat in August, contrary to the expected 0.4% rise, according to data from the Australian Bureau of Statistics.

This follows a 1.1% increase in July and marks a slowdown in annual growth to 6.8% from 7.0%.

The figures are based on current prices and not adjusted for inflation, which means that higher fuel costs and other price increases have inflated the headline numbers.

Only three of nine categories showed an increase: transport with a 2.3% rise, hotels, cafes and restaurants up 0.8%, and miscellaneous spending adding 0.3%. However, recreation and culture fell by 1.4%, while clothing and footwear and alcohol and tobacco each dropped 1.0%.

The RBA is expected to hike the cash rate to 4.60% on September 29, with Governor Michele Bullock's press conference at 3:30pm AEST.