Peak retail industry body the Australian Retailers Association (ARA) has welcomed the RBA’s February 1 rate hold as “the only responsible decision” given already stretched household budgets due to flood-driven increases in cost of living and taxes.
Retailers across the country breathed a short sigh of relief at news that already conservative consumer behaviour won’t be even further constrained by increased interest rates, ARA executive director Russell Zimmerman said.
“After the November rate rise shored up a soft Christmas for struggling retailers across the country, another interest rate rise today would have been a hard blow for the sector.
“With the post-GFC consumer trend to save more and spend less, retail sales have been disappointing for over 18 months and the sector is expecting to see flood-driven increases to the cost of living, as well as the new tax levy, tighten consumers’ purse strings further.
“This rate hold gives consumers a chance to start to manage their new budgets – which will include increases to essential food items, electricity, gas and the new flood tax – without worrying about higher mortgage repayments on top of that.
“After the RBA rate rise in November last year, the big four banks followed with even higher increases to mortgage repayments. But retailers are hoping the banks will now follow the RBA’s lead and give consumers a break,” Zimmerman said.
“Retailers are calling on the RBA to keep rates on hold for at least the next few months while both consumers and retailers get back on their feet.”