Australian Economy Australian interest rates

Strong household spending heaps more pressure on RBA

Thursday 27 August 2026

Following Wednesday’s stronger-than-expected trimmed-mean inflation by the Australian Bureau of Statistics (ABS), which led several major banks to forecast imminent interest rate hikes, the ABS on Thursday reported strong household spending in July.

Household spending rose by 1.1% in July to be 7.0% higher year-over-year, the strongest annual spending growth since June 2023. Both discretionary and non-discretionary spending rose.

The following charts from Alex Joiner at IFM Investors summarise the situation:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.