Stronger consumption growth unlikely to last

The evidence suggests that, after a paltry 0.9% annualised in the first quarter, second-quarter real consumption growth accelerated to 3.0% annualised. Unfortunately, we suspect that consumption growth will drop back in the second half of the year. Households benefitted from a one-off drop back in food and energy prices at the start of the second quarter, which left them with more money to spend on other goods and services. But most recently those prices have started to rebound again.