Australia's family spending growth reaches a two-year high, as oil price shocks increase pressure on the central bank to resist inflation.

After the outbreak of the Iran war pushed up gasoline prices, Australia's household spending in March increased at the fastest pace in two years, making the efforts of the Australian central bank to cool down the economy more complicated. Data released by the Australian Bureau of Statistics on Tuesday showed that household consumption expenditure in March increased by 6.3% year-on-year, higher than the economists' expectation of 6.1%. On a monthly basis, spending increased by 1.6%, slightly lower than the expected 1.8%, but still showing significant resilience in the face of rising costs. The bureau pointed out that the global supply chain disruptions caused by the conflict in the Middle East led to a sharp increase in fuel prices in early March, which remained high throughout the month. The bureau also stated that the data reflected changes in consumer behavior: drivers reduced the amount of fuel per refill to control costs but increased the frequency of refills, while a surge in public transportation usage also supported the demand data. Hours after the publication of this data, the market widely expected the Reserve Bank of Australia to raise interest rates for the third consecutive time, increasing the cash rate to 4.35%. Despite the energy impact of the Iran conflict squeezing household budgets, the overall strong data suggests that there are no signs of demand collapsing under the pressure of rising borrowing costs. According to a research report from Capital Economics, "Faced with oil price shocks, household spending has performed well, and the Reserve Bank of Australia is unlikely to have too many concerns about further tightening policy." The report noted that excluding transport, household spending still achieved a "considerable" 0.9% growth on a monthly basis, with 7 out of 9 spending categories recording increases. "Overall, the data indicates that despite the budgetary pressures from oil price shocks, household spending remains quite healthy." These data suggest that despite low consumer confidence, actual spending behavior remains quite robust, leaving the Reserve Bank of Australia with little choice but to continue maintaining its hawkish "outlier" status among global central banks.