Rate Cut To “Save The Furniture”?
Retailers Association (ARA) Executive Director Russell Zimmerman said the decision to lower rates was the RBA’s bid to ‘save the furniture’ in the face of the upcoming Federal election and political instability.
Yesterday, the Reserve Bank moved to lower the cash rate by 25 basis points to 2.5 percent – putting them at an all time low.
Several retailers were unwilling to comment on record about the latest rate cut, today, as reporting season gets into full swing.
However, the ARA boss was uncertain about the impact on spending, saying “retailers are optimistic that this interest cut may encourage consumers to let go of their purse strings somewhat.”
He also said the summer months ahead may bring some light to retailers.
Nab Economist Alan Oster told CN last week there was no end in sight for the dull spending environment, as consumers continue on their saving spree.
Retail figures from ABS this week show retail growth was flat in June.
“The RBA have provided some relief to Australian retailers, although it is concerning that this cut has come on the back of flat retail sales, predictions of rising unemployment and falling consumer and business confidence,” said Zimmerman.
The ARA are now calling on the banks to pass this rate cut in full.
Zimmerman also called for “clear commitments from both political parties regarding business growth, flexibility and lower taxes along with genuine tax and workplace reform.”