Buying ASX 200 shares? Here’s what the latest spending report means for interest rates in 2026

Buying S&P/ASX 200 Index (ASX: XJO) shares?

Then you’ve probably been keeping one eye on the shifting forecasts relating to Australia’s interest rate outlook for 2026.

For much of 2025, economists had been forecasting that ASX 200 investors could expect no less than two interest rate cuts from the Reserve Bank of Australia this year.

However, as inflation regained momentum over the latter months of 2025, it’s increasingly looking like the RBA will not just hold interest rates tight at the current 3.60%, but likely be forced to raise rates at least once in 2026.

With this picture in mind, here’s what the latest consumer spending data means for that outlook.

ASX 200 slides on household spending uptick

The Australian Bureau of Statistics released its November household spending report at 11:30am AEDT today. And the ASX 200 slipped 0.3% over the next half-hour.

That may be because investors fear the uptick in household spending could further cement an RBA interest rate hike when the central bank next meets on 3 February.

According to the ABS, Aussie household spending increased by 1.0% in November. This follows a 1.4% increase in Spending in October and a 0.4% lift in September.

As at the end of November, this sees Australia’s household spending up 6.3% year on year, which could help rekindle inflation.

Commenting on the latest spending data that looks to be pressuring the ASX 200 this afternoon, Tom Lay, ABS head of business statistics, said:

Household spending remained strong in November, continuing the strong rises in services and goods spending seen in October.

Services spending rose by 1.2%, driven by major events, including concerts and sporting fixtures. These events are linked to higher spending on catering, transport, and recreation and cultural activities.

Growth in goods spending, which lifted 0.9%, was driven by Black Friday sales. Clothing, footwear, furnishings, and electronics seeing the biggest gains as consumers took advantage of widespread discounts.

Household spending grew in all eight states and territories.

Miscellaneous goods and services led the spending boom for the 12 months to November, up 10.6% year-on-year. This was followed by recreation and culture, where spending surged 8.6% over the 12 months.

Prepare for higher interest rates

Last week, prior to the release of today’s ABS spending data, Commonwealth Bank of Australia (ASX: CBA) reiterated its expectations that ASX 200 investors will see the RBA lift the official cash rate in February.

“We maintain our view that the RBA will increase the cash rate by 25 basis points to 3.85% in February,” CBA economist Harry Ottley said.

The post Buying ASX 200 shares? Here’s what the latest spending report means for interest rates in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.