The Reserve Bank has cautioned there may not be many more interest rate cuts to come for stretched home buyers as new figures showed shoppers are opening their wallets on clothes, holidays and cafe meals.

Bank governor Michele Bullock said that signs of a lift in household spending, though welcome and not unexpected, could mean the economy was in a stronger position that did not necessitate deep cuts in official interest rates.

This week’s national accounts, which showed the economy expanded by 0.6 per cent in the three months to June, were driven largely by a solid bounce in consumer expenditure.

Bullock said the numbers were a little stronger than the back had expected, and reflected a lift in real incomes for many consumers and the “wealth effect” of higher house prices, which combin

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