Fast cars, pop stars and heavy metal icons have enticed Australians into a rare – and admittedly fairly modest – spending spree.The latest instalment of Commonwealth Bank's Household Spending Insights (HSI) index released this morning showed spending rose ever so slightly in October – up 0.8 per cent – driven in part by ticket sales for major events."Spending on ticketing services was up 27 per cent for the month with concerts including Oasis, Luke Combs and Metallica, as well as the Melbourne F1, all going on sale in October," the bank said.
Tickets for Metallica (pictured), Oasis, Luke Combs and the Formula 1 helped push up household spending in October. (Brett Murray/Metallica)Australians also spent more on household goods last month, while utilities spending dropped thanks to government energy rebates and the falling cost of fuel."Spending rose marginally in October as income tax cuts, lower petrol prices and energy rebates freed some consumers up to spend on discretionary items," CBA chief economist Stephen Halmarick said. "It's important to note however that this increase in discretionary spending only partially offset the fall seen in September as the October boost was driven by a number of one-off major events."Halmarick said the increase in spending was small enough that it's unlikely to delay any potential interest rate cut, and that a more substantial rise won't be seen until the RBA finally moves to push the cash rate down.
The small increase in spending is unlikely to impact interest rates. (Getty)"Higher disposable income from the July income tax cuts… may have helped strengthen spending in recent months, however the increase is likely softer than would have been expected by the RBA," he said. "We don't anticipate seeing a substantial increase in consumer spending until the RBA commences an interest rate easing cycle, which we now expect in February 2025."The HSI data shows a stark gap between the financial fortunes of renters, mortgage holders and homeowners.Spending among tenants has risen by just 1.8 per cent in the year to date – less than the rate of inflation – while it's increased by 3.4 per cent among those with a home loan and 4.4 per cent for people who own their home outright. The report came as fellow big four bank Westpac released its latest consumer sentiment survey result, which put confidence at a two-and-a-half-year high."Pretty much all parts of the monthly Westpac Melbourne Institute survey of consumer confidence recorded further strong improvement in November and have risen even more strongly from low points in either June or July this year," CreditorWatch chief economist Ivan Colhoun said. "This is likely to reflect the beneficial impacts of the government's 1 July income tax cuts together perhaps with expectations that interest rates will not rise further."The Reserve Bank will hold its final interest rates meeting for 2024 in the second week of December, but a cut is not expected until at least February.
