Borrowers are widely expected to dodge another mortgage bill bump at the first cash rate meeting of the year as data highlights the financial pain households are feeling.

Consumers went bargain hunting in the final months of the year and drove an uptick in retail volumes as measured by the Australian Bureau of Statistics.

The 0.3 per cent growth over the December quarter month followed a revised fall of 0.1 per cent in the September quarter.

ABS head of retail statistics Ben Dorber said the rise in the December retail sales volumes was fuelled by lower price growth for retail goods as end-of-year discounting kicked in.

Over the quarter, retail prices lifted a subdued 0.1 per cent, well below the 0.6 per cent in the September quarter.

“Consumers particularly took advantage of discounting for discretionary items like furniture and electronic goods,” Dorber said.

ANZ economists Madeline Dunk and Adelaide Timbrell said the series was looking particularly weak when accounting for population growth.

They said household spending would likely remain soft throughout the next six months as budgets were squeezed by inflation and elevated rents and mortgage payments.

“Some of these pressures may start to wane as we move into the second half of the year, with incomes getting a boost from fiscal easing, tax cuts and a potential rate cuts,” they wrote.

Ahead of Australia’s first cash rate meeting of 2024 on Tuesday afternoon, most forecasters are tipping no more interest rate hikes.

Critically, inflation eased to 4.1 per cent in the December quarter, down from 5.4 per cent in September, coming in slightly lower than expected.

All 27 experts and economists surveyed by Finder forecasted no change at the upcoming meeting.

The RBA’s economic forecasts are also likely to be tweaked to reflect improving economic conditions and its language toned down in its post-meeting statement and press conference.

But the Organisation for Economic Co-operation and Development warns it is too early to declare an end to the battle against inflation, urging countries to make sure underlying price pressures are “durably contained” before cutting interest rates.

In its latest economic outlook, the organisation said there was scope to begin lowering interest rates soon as long as enough progress was achieved on consumer prices.

“Scope exists to lower policy interest rates as inflation declines, but the policy stance should remain restrictive in most major economies for some time to come,” its report read.

While highlighting resilient global growth and faster-than-expected progress on inflation, the organisation warned it was “too soon to be sure” price pressures were under control.

It’s projecting inflation to be back within target in most G20 countries by the end of 2025.

Global growth forecasts have also been revised up, underpinned by economic strength in the US, to 2.9 per cent in 2024, up from 2.7 in its previous forecast.

– AAP