The Commonwealth Bank of Australia (CBA) continues to put pressure on the Reserve Bank of Australia (RBA) by reiterating its prediction for a rate cut in December.

CBA's Chief Economist, Stephen Halmarick, noted that the Australian economic conditions are deteriorating.

The CommBank Household Spending Intentions (HSI) index fell by 0.7% in September, reaching 146.7.

Overall, spending was weak in September, with spending in the entertainment sector being a bright spot.

This was mainly due to sports enthusiasts rushing to buy tickets for the AFL and NRL grand finals, leading to an 18% surge in ticket services.

Spending on education and insurance also increased, growing by 0.7% respectively.

"We still believe that due to weak economic data (including weakness relative to RBA expectations), further easing of inflation, and other major central banks easing monetary policy, the RBA will start to cut rates at the end of the year, with our prediction being December," Halmarick stated.

HSI data shows that income after tax cuts was mainly used to pay bills, rather than flowing into the economy. While CBA's latest expectations suggest that a rate cut could become an Australian Christmas gift, there is still a divergence between the RBA and the market.The RBA reiterated in the minutes of its September board meeting that "monetary policy needs to remain sufficiently restrictive until members are confident that inflation is moving sustainably towards the target range."

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Despite the market still focusing on changes in language, namely the board's removal of a sentence from the August meeting, "it is unlikely that the cash rate target will be reduced in the near term."

The market expects the central bank to cut interest rates by 50 basis points in July 2025, by 75 basis points by the end of 2025, and finally reduce the official cash rate to 3.6%.

Renters, on the other hand, are bearing the brunt of the cost of living crisis and are the only group to reduce spending this year.

HSI data shows that renters' spending growth is the weakest, with an annual decrease of 1.1% as of September (original data). Meanwhile, the annual growth rate of spending for homeowners with mortgages is 1.2%, and for homeowners without mortgages, it is 2.3%.

The report states that renters have reduced spending on transportation, household services, hospitality, food and beverages, entertainment, and automobiles.

This data echoes a report by Everybody's Home, which shows that rents have risen astonishingly since Covid-19.

The data shows that since January 2020, renters have spent nearly an additional 15,000 Australian dollars per year on rent, but for those living in Sydney and Perth, this amount exceeds 18,000 Australian dollars per year.Maiy Azize, a spokesperson for Everybody's Home, stated that for the majority of people living in Australia, the largest expense in their cost of living is maintaining housing.

"Australians are being pushed out of the cities where they work, which will affect the livability of our cities and the quality of basic services."