Latest news with #BelindaAllen
Perth Now
5 days ago
- Business
- Perth Now
Footy fans help consumer spending roar into growth
Footy fever has helped score a try for consumer spending, with a series of big matches prompting Australians to open their wallets, the nation's biggest bank says. The British and Irish Lions rugby union tour and the State of Origin rugby league decider helped push household spending up 0.8 per cent in July, according to the Commonwealth Bank. "Fans spent up on travel, entertainment and accommodation," economist Belinda Allen said. About 83,000 fans bought tickets for the State of Origin decider, which was won by Queensland, in Sydney on July 9. The British and Irish Lions tour included nine matches in six cities attended by about 452,000 people, with all but two played in July. Recreation spending was up 1.8 per cent and hospitality spending increased 1.5 per cent. Overall, 10 out of the 12 CommBank Household Spending Insights Index categories recorded growth in July. Motor vehicle spending rose 1.4 per cent, insurance increased 1.2 per cent, and health was up 1.1 per cent. "We have been anticipating a lift in household spending for some time, supported by rising real disposable incomes, increased household wealth, and a resilient labour market," Ms Allen said. Spending on education was flat, and utilities fell 0.5 per cent. The index shows spending has risen 6.4 per cent in 2025. The biggest gains occurred in the communications and digital, up 10.9 per cent; recreation, up 10.3 per cent; and hospitality, up 10.0 per cent. "Strong growth in spending on recreation and hospitality over the year underscores that consumers are prioritising experiences and being deliberate about their spending choices," Ms Allen said. "We expect a further pickup in spending through the rest of this year and into next, helping to drive a broader economic recovery." Education was the weakest category in 2025, down 1.8 per cent. Spending on utilities was up over the year due to cost-of-living energy subsidies being wound back. The bank expects the Reserve Bank to further cut the cash rate in November to 3.35 per cent. "A lower rate environment should help fuel consumer optimism and spending in the year ahead, and into 2026," Ms Allen said.
Yahoo
12-08-2025
- Business
- Yahoo
Major bank responds to supersized RBA rate cut prediction giving homeowners $2,250 cash boost
Commonwealth Bank (CBA) has shut down speculation surrounding the possibility of a supersized rate cut from the Reserve Bank of Australia (RBA) today. The RBA will reveal whether it will hike, hold or cut the official cash rate from the current 3.85 per cent mark at 2.30pm (AEST). Despite the majority of experts tipping a 0.25 per cent reduction, there has been speculation of a 0.50 per cent cut following a surprise hold in July. However, CBA senior economist Belinda Allen told Yahoo Finance a supersized cut would be "extremely unlikely". "The economy is performing as [the RBA] expects, so the cautious and gradual easing cycle can continue," she said. RELATED CBA, Westpac, NAB, ANZ reveal interest rate cut forecasts as RBA decide Centrelink warning for downsizing Baby Boomers over 'special' retirement rule Kiwi couple move to Australia after 'overwhelming' $20,000 cost to start family The Australian Stock Exchange (ASX) Rate Tracker monitors the market's expectations around cash rate decisions, which is based on the determined prices in the ASX 30-Day Interbank Cash Rate Futures. Its most recent update, which was posted on August 11, said there was a 51 per cent chance of a 50 basis point reduction from the RBA today. That would bring the cash rate down from 3.85 per cent to 3.35 per cent. That prediction is up from a 47 per cent likelihood in late July. If there was a supersized rate cut, a person with a $660,000 mortgage would save around $210 per month, or $2,250 per there be a rate cut at the RBA's August meeting? CBA economists have described a cut in the RBA's August meeting is a "done deal". Economists from Westpac, NAB and ANZ have echoed sentiments from Australia's biggest bank, forecasting a third 0.25 per cent rate cut for the year. Many were dismayed when the July RBA meeting resulted in a hold. However, Allen told Yahoo Finance the Board didn't have the right information at the time. 'Back in July, they said it was about timing, not about direction,' she said. The RBA only had month-to-month inflation data when it met last month, however the Australian Bureau of Statistics has now dropped its quarterly assessment of the consumer price index (CPI). Underlying inflation, a key metric in the RBA's decision-making, dropped from 2.9 per cent to 2.7 per cent between the March and June quarters. The RBA has stated its underlying inflation target sits between 2 and 3 per cent. Allen said the quarterly inflation data has given the Board the data to warrant another rate cut. 'We've had that five-week period and the inflation data has come in as expected," Allen told Yahoo Finance. "You could even argue that the inflation data could have been a little bit softer than what they were expecting, so all signs point to them continuing their easing cycle today." The predicted interest rate cutting cycle, which is forecast to stretch into 2026, will drive property prices up by 10 per cent by the end of next year, CBA said. When will the next interest rate cut come? The Big Four Banks have all tipped November as the next time homeowners could get further mortgage relief. CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent ANZ: Two more cuts in August and November to bring cash rate to 3.35 per cent There is another meeting in September, however Allen warned that without the full quarterly inflation data, the RBA was likely to hold again as they waited for a full picture of the economic climate. The quarterly data will be next posted just before the November meeting. 'To deviate from that quarterly cadence, it would have to take a real big surprise in the data, as we know they're still a bit reluctant to rely on the monthly CPI,' she said. 'Unless you see, for example, a material lift in the unemployment rate, they'll stick to that once a quarter easing cycle.'Sign in to access your portfolio
Sydney Morning Herald
10-08-2025
- Business
- Sydney Morning Herald
Reserve Bank poised to reverse its rate ‘mistake'
Australians' disposable income has finally recovered to where it was before the pandemic and is poised to be buoyed by an interest rate cut as the Reserve Bank makes up for its shock decision last month to deny relief to the nation's home buyers and businesses. Financial markets and economists are unanimous in expecting the bank to confirm the third cut in official interest rates this year following a two-day meeting that begins on Monday, delivering a $100 a month saving to Australians with a $600,000 mortgage. Their belief has not been dampened despite the surprise of the Reserve's decision in July to keep rates steady after markets put the chance of a cut at 100 per cent. The hold decision was close run, board members supporting the move 6-3 in what was the first ever open split within the bank on rate settings. Confirming the decision last month, bank governor Michele Bullock said while future interest rate cuts were likely, the issue was a matter of timing as she noted the importance of upcoming June quarter inflation figures. They showed both headline and underlying inflation easing and within the RBA's 2-3 per cent target band. Headline inflation at 2.1 per cent fell to its lowest level since early 2021. Loading The inflation numbers came after softer-than-expected jobs figures for June, the unemployment rate rising to a three-year high of 4.3 per cent. Job creation for the past three months has been effectively flat. CBA senior economist Belinda Allen said a rate cut on Tuesday was a done deal. She said the economic data – including the quarterly inflation report and last month's softer-than-expected jobs figures – since the Reserve's July decision all pointed to a loosening of monetary policy this week.
The Age
10-08-2025
- Business
- The Age
Reserve Bank poised to reverse its rate ‘mistake'
Australians' disposable income has finally recovered to where it was before the pandemic and is poised to be buoyed by an interest rate cut as the Reserve Bank makes up for its shock decision last month to deny relief to the nation's home buyers and businesses. Financial markets and economists are unanimous in expecting the bank to confirm the third cut in official interest rates this year following a two-day meeting that begins on Monday, delivering a $100 a month saving to Australians with a $600,000 mortgage. Their belief has not been dampened despite the surprise of the Reserve's decision in July to keep rates steady after markets put the chance of a cut at 100 per cent. The hold decision was close run, board members supporting the move 6-3 in what was the first ever open split within the bank on rate settings. Confirming the decision last month, bank governor Michele Bullock said while future interest rate cuts were likely, the issue was a matter of timing as she noted the importance of upcoming June quarter inflation figures. They showed both headline and underlying inflation easing and within the RBA's 2-3 per cent target band. Headline inflation at 2.1 per cent fell to its lowest level since early 2021. Loading The inflation numbers came after softer-than-expected jobs figures for June, the unemployment rate rising to a three-year high of 4.3 per cent. Job creation for the past three months has been effectively flat. CBA senior economist Belinda Allen said a rate cut on Tuesday was a done deal. She said the economic data – including the quarterly inflation report and last month's softer-than-expected jobs figures – since the Reserve's July decision all pointed to a loosening of monetary policy this week.
Yahoo
23-07-2025
- Business
- Yahoo
Major bank exposes 'critical' detail needed for interest rate cut in weeks
Commonwealth Bank (CBA) believes an August interest rate cut from the Reserve Bank of Australia (RBA) hangs on one "critical" piece of information. The RBA shocked the nation this month when it decided to hold the cash rate at 3.85 per cent, despite the "almost universal" expectation of a 25 basis point cut. The Australian Bureau of Statistics (ABS) is set to release quarterly inflation data next Wednesday, and the Big Four bank said that it will be do-or-die for homeowners. CBA senior economist Belinda Allen said all eyes will be on those numbers when they drop just before midday. "By the August meeting, data on quarterly inflation data together with fresh forecasts and another labour market print would provide additional information," she said. "The upcoming Q2 25 CPI print... is critical. RELATED Major inflation change following RBA's shock interest rate decision Centrelink's 'balancing' move could provide cash boost or expose debt Commonwealth Bank's fresh alert for millions over mass text messages "Despite the unemployment rate shifting higher to 4.3 per cent, the RBA Monetary Policy Board has shown they remain focused on returning inflation to the mid-point. "A shift lower in the annual rate of trimmed mean inflation should be sufficient to see the cash rate lowered in August. "Market pricing for an August rate cut is over 100 per cent priced. But it is not a done deal." The quarterly consumer price index (CPI) figures give a much broader snapshot of how Australia is faring with inflation, and it trumps the monthly data that the RBA had to work with during its July meeting. The last quarterly CPI release showed trimmed inflation was sitting at 2.9 per cent. While that is within the RBA's 2 to 3 per cent target range, it's clear the central bank wanted to see that number lower before issuing the third rate cut of did the RBA hold interest rates at its July meeting? Six Board members were in favour of a hold, while three favoured a cut. Those latter members said there were "downside risks" to Australia's economic outlook, partly due to "a likely slowing in growth abroad and from the subdued pace of GDP growth in Australia". The RBA published the minutes of its July 7-8 meeting this week and, interestingly, it revealed the shock decision to hold wasn't solely due to a lack of broader inflation information. 'The labour market was assessed to have remained tight, with measures of labour utilisation little changed over the prior year,' it said. 'Growth in private demand had begun to recover, but was still subdued.' Unemployment data was released just last week and confirmed the jobless rate had spiked by 0.2 per cent in June, seasonally adjusted. But the Board's minutes hinted it wanted to see more detailed CPI data before another cut could be granted. "All members agreed that, based on the information currently available, the outlook was for underlying inflation to decline further in year-ended terms, warranting some additional reduction in interest rates over time," it said. "The focus at this meeting was on the appropriate timing and extent of further easing, against the backdrop of heightened uncertainty." RBA will soon have better monthly data The monthly data released by the ABS is about to get much more detailed. At the moment, monthly CPI data only includes price information for 66 to 77 per cent of the CPI basket. Each month has different components in it, and the trimmed mean inflation isn't calculated the same way as the quarterly indicator. For example, the May monthly CPI indicator showed headline inflation was at 2.1 per cent and trimmed mean inflation was sitting at 2.4 per cent. However, the March quarterly CPI indicator showed inflation was at 2.4 per cent and trimmed mean inflation at 2.9 per cent. From November 26, the ABS confirmed it will release a fully-formed monthly inflation report, which will bring Australia in line with all but one OECD nation. RBA governor Michele Bullock indicated the current model was "difficult" as there were more Board meetings each year than there were quarterly inflation statements. "We only get four readings a year,' she said after the July meeting. "It is very difficult on four readings a year to get an idea of momentum of inflation. 'Other countries have full CPIs every month, and a much better idea about the momentum of inflation coming from that. 'So that's why, and I think the board in its decision has been cautious, careful and it is trying to make sure that it gets this right. This has paid off well for us.'Error in retrieving data Sign in to access your portfolio Error in retrieving data
