Spending is surging across the economy, helped by the small business measures in the May federal budget.

In July, spending was up 1.2 per cent, the fastest pace in four months, and was up 7.4 per cent on a year ago, the Commonwealth Bank’s seasonally-adjusted Business Sales Indicator (BSI) showed.

CommSec chief economist Craig James said there was a 0.8 per cent boost in the business services category, which includes purchases of office furniture, computers, commercial equipment and industrial supplies.

The federal budget included an increase in the instant asset write-off to $20,000, effective from budget night, from the previous threshold of $1,000.

“It is still clear that small businesses are embracing government stimulus measures,” Mr James said.

“For most of 2014, spending at business services was going backwards. But for the past five months solid gains in business spending has been recorded.”

Mr James said if spending growth continues, the Reserve Bank can safely hold off on an interest rate cut.

“The latest data on the economy continues to encourage. Businesses have joined consumers in lifting spending, and economywide spending is now growing at an above-normal pace,” Mr James said.

The survey measures economywide spending by tracking credit and debit card transactions at CBA machines.