Australia's love for music and fast cars leads to a spending frenzy.

Australians have been indulging in a rare spending spree, fueled by the excitement of fast cars, pop stars, and heavy metal icons. The recent release of Commonwealth Bank's Household Spending Insights index has revealed a slight increase in spending for the month of October, with a rise of 0.8%. This boost can be attributed, in part, to the sale of tickets for major events that captured the attention of many, such as concerts by Oasis, Luke Combs, and Metallica, as well as the Melbourne F1 race.

In addition to entertainment, Australians also splurged on household goods last month. However, there was a decrease in spending on utilities due to government energy rebates and the drop in fuel prices. According to CBA's chief economist Stephen Halmarick, this increase in discretionary spending only partially offset the decrease seen in September. He also notes that the rise in spending was mainly driven by one-time events, and not a sustainable trend.

Halmarick further explains that this slight increase in spending is not significant enough to affect any potential interest rate cuts. He predicts that a more substantial rise in spending will not be seen until the Reserve Bank of Australia (RBA) finally decides to lower the cash rate. This is expected to happen in February 2025.

The HSI data also highlights a significant gap in spending among renters, mortgage holders, and homeowners. Renters have only seen a meager 1.8% increase in spending this year, which is less than the rate of inflation. On the other hand, those with a home loan have increased their spending by 3.4%, while homeowners without a mortgage have seen a 4.4% rise in spending.

Meanwhile, another big four bank, Westpac, released its latest consumer sentiment survey result, which showed a two-and-a-half-year high in confidence levels. CreditorWatch chief economist Ivan Colhoun attributes this positive outlook to the recent income tax cuts implemented on July 1st, along with the expectation that interest rates will not increase anytime soon.

The RBA is set to have its final interest rates meeting for 2024 in the second week of December. However, experts do not anticipate a cut until at least February. Until then, Australians can enjoy their rare spending spree, fueled by exciting events and a boost in disposable income.

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