Chart of the Day 3

Borrowers appear to be holding their larger repayments to continuing the trend to repay debt, rather than freeing up their cash flow for spending as rates fall. In a post on 11th July, I discussed how most borrowers were electing to keep their repayments at high levels forgoing spending that retailers had been looking for. This is continuing on the latest bank loan data from CBA.

According to CBA: "Households have preferred to use additional real household disposable income growth to save and pay down debt rather than spend." The economy is then more reliant on population growth and the wealth effect.

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