Demand for housing credit is up, as are house prices, and purchases of some investment goods by firms rose mid year. Some of this strength is likely to be temporary, the result of fiscal measures that have a finite life.
We are assuming, for example, that consumer demand, and first home buyer demand for finance, will be softer in the second half of the year. Nonetheless, the retreat from the extreme risk aversion of nine months ago, the partial recovery of household net worth and the impact of low interest rates will offer support to private demand over the period ahead.