Residential construction continues to contract, and the overhang of unsold new homes remains large, although it has declined some in absolute terms. Consumer spending has thus far held up a bit better than expected, but households continue to face significant headwinds, including falling house prices, a softer job market, tighter credit, and higher energy prices, and consumer sentiment has declined sharply since the fall.
The path for the repo rate however remains supportive of credit demand in the near term, even as rates rise in  1 The average level of settlement in Q1 was 6.3% for all sectors bar utilities in which no agreements  had been reached by the end of Q1. Notable agreements concluded in Q2 included Eskom (7%), Implats (6.5%) and Sibanye Stillwater (5.1%).