Early signs rate rises and inflation starting to bite: CBA

There are some early signs the combination of soaring inflation and higher interest rates is starting to crimp the spending plans of Australians, putting the Reserve Bank on notice about its plans to tighten monetary policy further.

But Commonwealth Bank chief economist Stephen Halmarick said the small lift in August highlighted the overall momentum in the economy plus the impact of inflationary pressures. “Spending for household services has also risen 4 per cent in August, with charitable donations leading the category, likely signalling a stressful environment for many in the community.”

Despite the increase, the ANZ-Roy Morgan weekly measure of consumer confidence – released on Tuesday – showed only a small dip in shopper sentiment.

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Early signs rate rises and inflation starting to bite: CBAA measure of planned spending by consumers suggests high inflation and the increase in interest rates is starting to hit shoppers.
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