STRUGGLING RETAILERS QUESTION RBA DECISION TO HOLD INTEREST RATE

STRUGGLING RETAILERS QUESTION RBA DECISION TO HOLD INTEREST RATE

A RETAIL industry group warns the Reserve Bank of Australia (RBA) must lower the base interest rate to allow a speedy recovery for the sector.

The National Retail Association (NRA) questioned the RBA's latest decision to hold the cash rate at 3.5 per cent due to “firm” consumption growth in the first half of 2012.

Executive director Gary Black (pictured) says the latest Australian Bureau of Statistics data shows retail sales had dwindled by 0.2 per cent to a seasonally adjusted $21.4 billion in July. Forecasters had predicted a 0.2 per cent rise in retail spending.

“What these figures show is that the retail sector is far from being on the road to recovery,” says Black.

“Retailers continue to do it tough and there is a general feeling among store owners that perhaps politicians and regulators do not appreciate just how tough trading conditions are right now.”

However, RBA governor Glenn Stevens defends the Board’s decision to leave the rate unchanged for the third consecutive month. He cites moderate employment growth and increased capital expenditure in the resources sector as reason for not adjusting the rate.

“With inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” he says.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Accolade Wines owner buys French giant Pernod Ricard’s global wine assets

Accolade Wines owner buys French giant Pernod Ricard’s global wine assets

Australian Wine Holdco, a consortium that owns the country’s ...

Aussie boxing franchise UBX to enter United Arab Emirates

Aussie boxing franchise UBX to enter United Arab Emirates

Brisbane-based boxing franchise UBX has announced its eighth intern...

Zip Co raising up to $267 million to pay down debt

Zip Co raising up to $267 million to pay down debt

With shares in buy-now pay-later giant Zip Co (ASX: ZIP) now tradin...

Telstra fined $1.55m by ACMA for failings in thwarting SIM-swap scams

Telstra fined $1.55m by ACMA for failings in thwarting SIM-swap scams

A failure by Telstra to implement customer ID authentication proces...