Retailers want more rate cuts | IR News

Retailers want more rate cuts

Posted Date: 26/01/2012

By Inside Retail

ARA chief Russell Zimmerman has called on the Reserve Bank to reduce interest rates in February after figures showed the Consumer Price Index (CPI) dropped from 3.5 per cent down to 3.1 per cent.

Zimmerman said given current weak consumer sentiment and lacklustre retail trade growth, the lower annual CPI confirms the case for reducing interest rates.

“The RBA has to take into account CPI when making a decision to cut interest rates, however the low inflation rate means there’s no reason for the RBA not to cut rates.

“The latest ABS figures released in early January showed no growth where retailers were expecting a boost due to an interest rate cut and early Christmas shoppers. However, retail has remained flat and that is an indication of weak consumer confidence and the need for relief.

“As consumers head into February they will be ensuring debts from Christmas are paid off and household spending is monitored.

“Unfortunately a lack of consumer confidence means retailers are not making the start to the year they hoped for and any predictions for growth will be put on hold," he said in a statement.

“While a lowering of interest rates is the outcome retailers need to help rebuild consumer confidence, ARA warns the Government can’t place any more burden on consumers or business through additional taxes or charges.

“It’s clear retailers are bearing the burden of decreased spending in uncertain economic times. ARA is looking to governments not to increase the cost of living through additional taxes and charges as federal and state budget considerations commence in the New Year.

“With December trade figures to be released in February, retailers are hopeful of some Christmas spending cheer given most people leave their Christmas shopping to the last minute. But ARA expectations for growth over the holiday season are soft with only a 2.2 per cent growth predicted compared to Christmas 2010,” Zimmerman said.

Keywords: ARA, interest rates

Comments:

Monday, January 30, 2012 by DHAWAN

Get Labour Costs down. Save the economy

Friday, January 27, 2012 by alans

i don't know if andrew has been living on the moon for the last 18 mnths or so, but the fact of the matter is our interest rates are too high, and accordingly customers are not spending.you don't have to be a brain surgeon to work out the correlation between the two. apart from that, it does make a welcome change from the usual union dogma on workchoices and how the "new" fair work australia is working; not.

Thursday, January 26, 2012 by Andrew

I reckon at least once a week, one of the articles in the daily Inside Retail Online Daily News Brief is the ARA asking for a rate cut!
Woe is me, we need a rate cut!!!!!
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