SYDNEY, Nov 1 Reuters Australian household spending fell in September as consumers cut back on clothing and cars, data showed on Friday, further confirmation that billions of dollars in recent tax cuts were being saved rather than spent.

That should be a downside surprise to the Reserve Bank of Australia RBA which had expected consumption to pick up in the second half of this year and could see it adopt a more dovish tone at a policy meeting next week.

The data looks very weak over the last three months and surprisingly soft, said Gareth Aird, head of Australian economics at CBA.

If the data is close to accurate there will be no taxcut induced rebound in consumption in the national accounts for Q3.

The Australian Bureau of Statistics39; monthly household spending indicator MHSI showed a seasonally adjusted fall of 0.1 in September from August, when it rose 0.2. Annual growth slowed sharply to 1.3, from 2.7, the lowest since August 2021 when a renewed COVID19 outbreak hit Australia.

Spending on everything from food to cars, healthcare and travel, totalled A69.9 billion in September, little changed from where it was at the start of the year.

Spending in volume terms was also weak, being down 0.4 in the entire September quarter compared to the same period last year.

That was a notably subdued performance given population growth is running at a rapid 2.5 pace and billions of dollars of tax cuts fattened consumer wallets from July.

The MHSI series will replace the…